Chapter 97.
Workers' Compensation Act.
Article 1.
Workers' Compensation Act.
§ 97-1. Short title.
This Article shall be known and cited as The North Carolina Workers' Compensation Act.
(1929, c. 120, s. 1; 1979, c. 714, s. 1.)
§ 97-1.1. References to workmen's compensation.
Any reference in any act, public or local, to the "Workmen's Compensation Act,"
"Workmen's Compensation," or "workmen's compensation" shall be deemed to refer respectively
to "Workers' Compensation Act," "Workers' Compensation" or "workers' compensation." (1979,
c. 714, s. 4.)
§ 97-2. Definitions.
When used in this Article, unless the context otherwise requires:
(1)
Employment. – The term "employment" includes employment by the State
and all political subdivisions thereof, and all public and quasi-public
corporations therein and all private employments in which three or more
employees are regularly employed in the same business or establishment or in
which one or more employees are employed in activities which involve the
use or presence of radiation, except agriculture and domestic services, unless
10 or more full-time nonseasonal agricultural workers are regularly employed
by the employer and an individual sawmill and logging operator with less than
10 employees, who saws and logs less than 60 days in any six consecutive
months and whose principal business is unrelated to sawmilling or logging.
(2)
Employee. – The term "employee" means every person engaged in an
employment under any appointment or contract of hire or apprenticeship,
express or implied, oral or written, including aliens, and also minors, whether
lawfully or unlawfully employed, but excluding persons whose employment is
both casual and not in the course of the trade, business, profession, or
occupation of his employer, and as relating to those so employed by the State,
the term "employee" shall include all officers and employees of the State,
including such as are elected by the people, or by the General Assembly, or
appointed by the Governor to serve on a per diem, part-time or fee basis,
either with or without the confirmation of the Senate; as relating to municipal
corporations and political subdivisions of the State, the term "employee" shall
include all officers and employees thereof, including such as are elected by
the people. The term "employee" shall include members of the North Carolina
National Guard while on State active duty under orders of the Governor and
members of the North Carolina State Defense Militia while on State active
duty under orders of the Governor. The term "employee" shall include deputy
sheriffs and all persons acting in the capacity of deputy sheriffs, whether
appointed by the sheriff or by the governing body of the county and whether
serving on a fee basis or on a salary basis, or whether deputy sheriffs serving
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upon a full-time basis or a part-time basis, and including deputy sheriffs
appointed to serve in an emergency, but as to those so appointed, only during
the continuation of the emergency. The sheriff shall furnish to the board of
county commissioners a complete list of all deputy sheriffs named or
appointed by him immediately after their appointment and notify the board of
commissioners of any changes made therein promptly after such changes are
made. Any reference to an employee who has been injured shall, when the
employee is dead, include also the employee's legal representative,
dependents, and other persons to whom compensation may be payable:
Provided, further, that any employee, as herein defined, of a municipality,
county, or of the State of North Carolina, while engaged in the discharge of
the employee's official duty outside the jurisdictional or territorial limits of the
municipality, county, or the State of North Carolina and while acting pursuant
to authorization or instruction from any superior officer, shall have the same
rights under this Article as if such duty or activity were performed within the
territorial boundary limits of their employer.
Except as otherwise provided herein, every executive officer elected or
appointed and empowered in accordance with the charter and bylaws of a
corporation shall be considered as an employee of such corporation under this
Article.
Any such executive officer of a corporation may, notwithstanding any
other provision of this Article, be exempt from the coverage of the
corporation's insurance contract by such corporation's specifically excluding
such executive officer in such contract of insurance, and the exclusion to
remove such executive officer from the coverage shall continue for the period
such contract of insurance is in effect, and during such period such executive
officers thus exempted from the coverage of the insurance contract shall not
be employees of such corporation under this Article.
All county agricultural extension service employees who do not receive
official federal appointments as employees of the United States Department of
Agriculture and who are field faculty members with professional rank as
designated in the memorandum of understanding between the North Carolina
Agricultural Extension Service, North Carolina State University, A & T State
University, and the boards of county commissioners shall be deemed to be
employees of the State of North Carolina. All other county agricultural
extension service employees paid from State or county funds shall be deemed
to be employees of the county board of commissioners in the county in which
the employee is employed for purposes of workers' compensation.
The term "employee" shall also include members of the Civil Air Patrol
currently certified pursuant to G.S. 143B-1031(a) when performing duties in
the course and scope of a State-approved mission pursuant to Subpart C of
Part 5 of Article 13 of Chapter 143B of the General Statutes.
"Employee" shall not include any person performing voluntary service as
a ski patrolman who receives no compensation for such services other than
meals or lodging or the use of ski tow or ski lift facilities or any combination
thereof.
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"Employee" shall not include any person elected or appointed and
empowered as an executive officer, director, or committee member under the
charter, articles, or bylaws of a nonprofit corporation subject to Chapter 47A,
47C, 47F, 55A, or 59B of the General Statutes, or any organization exempt
from federal income tax under section 501(c)(3) of the Internal Revenue
Code, who performs only voluntary service for the nonprofit corporation,
provided that the person receives no remuneration for the voluntary service
other than reasonable reimbursement for expenses incurred in connection with
the voluntary service. When a nonprofit corporation as described herein
employs one or more persons who do receive remuneration other than
reasonable reimbursement for expenses, then any volunteer officers, directors,
or committee members excluded from the definition of "employee" by
operation of this paragraph shall be counted as employees for the sole purpose
of determining the number of persons regularly employed in the same
business or establishment pursuant to G.S. 97-2(1). Other than for the limited
purpose of determining the number of persons regularly employed in the same
business or establishment, such volunteer nonprofit officers, directors, or
committee members shall not be "employees" under the Act. Nothing herein
shall prohibit a nonprofit corporation as described herein from voluntarily
electing to provide for workers' compensation benefits in the manner provided
in G.S. 97-93 for volunteer officers, directors, or committee members
excluded from the definition of "employee" by operation of this paragraph.
This paragraph shall not apply to any volunteer firefighter, volunteer member
of an organized rescue squad, an authorized pickup firefighter when that
individual is engaged in emergency fire suppression activities for the North
Carolina Forest Service, a duly appointed and sworn member of an auxiliary
police department organized pursuant to G.S. 160A-282, or a senior member
of the State Civil Air Patrol functioning under Subpart C of Part 5 of Article
13 of Chapter 143B of the General Statutes, even if such person is elected or
appointed and empowered as an executive officer, director, or committee
member under the charter, articles, or bylaws of a nonprofit corporation as
described herein.
Any sole proprietor or partner of a business or any member of a limited
liability company may elect to be included as an employee under the workers'
compensation coverage of such business if he is actively engaged in the
operation of the business and if the insurer is notified of his election to be so
included. Any such sole proprietor or partner or member of a limited liability
company shall, upon such election, be entitled to employee benefits and be
subject to employee responsibilities prescribed in this Article.
"Employee" shall include an authorized pickup firefighter of the North
Carolina Forest Service of the Department of Agriculture and Consumer
Services when that individual is engaged in emergency fire suppression
activities for the North Carolina Forest Service. As used in this section,
"authorized pickup firefighter" means an individual who has completed
required fire suppression training as a wildland firefighter and who is
available as needed by the North Carolina Forest Service for emergency fire
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(3)
(4)
(5)
suppression activities, including immediate dispatch to wildfires and standby
for initial attack on fires during periods of high fire danger.
It shall be a rebuttable presumption that the term "employee" shall not
include any person performing services in the sale of newspapers or
magazines to ultimate consumers under an arrangement whereby the
newspapers or magazines are to be sold by that person at a fixed price and the
person's compensation is based on the retention of the excess of the fixed
price over the amount at which the newspapers or magazines are charged to
the person.
Employer. – The term "employer" means the State and all political
subdivisions thereof, all public and quasi-public corporations therein, every
person carrying on any employment, and the legal representative of a
deceased person or the receiver or trustee of any person. The board of
commissioners of each county of the State, for the purposes of this law, shall
be considered as "employer" of all deputy sheriffs serving within such county,
or persons serving or performing the duties of a deputy sheriff, whether such
persons are appointed by the sheriff or by the board of commissioners and
whether serving on a fee basis or salary basis. Each county is authorized to
insure its compensation liability for deputy sheriffs to the same extent it is
authorized to insure other compensation liability for employees thereof. For
purposes of this Chapter, when an authorized pickup firefighter of the North
Carolina Forest Service of the Department of Agriculture and Consumer
Services is engaged in emergency fire suppression activities for the North
Carolina Forest Service, that individual's employer is the North Carolina
Forest Service.
Person. – The term "person" means individual, partnership, association or
corporation.
Average Weekly Wages. – "Average weekly wages" shall mean the earnings
of the injured employee in the employment in which the employee was
working at the time of the injury during the period of 52 weeks immediately
preceding the date of the injury, including the subsistence allowance paid to
veteran trainees by the United States government, provided the amount of said
allowance shall be reported monthly by said trainee to the trainee's employer,
divided by 52; but if the injured employee lost more than seven consecutive
calendar days at one or more times during such period, although not in the
same week, then the earnings for the remainder of such 52 weeks shall be
divided by the number of weeks remaining after the time so lost has been
deducted. Where the employment prior to the injury extended over a period of
fewer than 52 weeks, the method of dividing the earnings during that period
by the number of weeks and parts thereof during which the employee earned
wages shall be followed; provided, results fair and just to both parties will be
thereby obtained. Where, by reason of a shortness of time during which the
employee has been in the employment of his employer or the casual nature or
terms of his employment, it is impractical to compute the average weekly
wages as above defined, regard shall be had to the average weekly amount
which during the 52 weeks previous to the injury was being earned by a
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person of the same grade and character employed in the same class of
employment in the same locality or community.
But where for exceptional reasons the foregoing would be unfair, either to
the employer or employee, such other method of computing average weekly
wages may be resorted to as will most nearly approximate the amount which
the injured employee would be earning were it not for the injury.
Wherever allowances of any character made to an employee in lieu of
wages are specified part of the wage contract, they shall be deemed a part of
his earnings.
Where a minor employee, under the age of 18 years, sustains a permanent
disability or dies leaving dependents surviving, the compensation payable for
permanent disability or death shall be calculated, first, upon the average
weekly wage paid to adult employees employed by the same employer at the
time of the accident in a similar or like class of work which the injured minor
employee would probably have been promoted to if not injured, or, second,
upon a wage sufficient to yield the maximum weekly compensation benefit.
Compensation for temporary total disability or for the death of a minor
without dependents shall be computed upon the average weekly wage at the
time of the accident, unless the total disability extends more than 52 weeks,
and then the compensation may be increased in proportion to the employee's
expected earnings.
In case of disabling injury or death to a volunteer firefighter; volunteer
member of an organized rescue squad; an authorized pickup firefighter, as
defined in subdivision (2) of this section, when that individual is engaged in
emergency fire suppression activities for the North Carolina Forest Service; a
duly appointed and sworn member of an auxiliary police department
organized pursuant to G.S. 160A-282; or senior members of the State Civil
Air Patrol functioning under Subpart C of Part 5 of Article 13 of Chapter
143B of the General Statutes, under compensable circumstances,
compensation payable shall be calculated upon the average weekly wage the
volunteer firefighter, volunteer member of an organized rescue squad,
authorized pickup firefighter of the North Carolina Forest Service; when that
individual is engaged in emergency fire suppression activities for the North
Carolina Forest Service, member of an auxiliary police department, or senior
member of the State Civil Air Patrol was earning in the employment wherein
he principally earned his livelihood as of the date of injury. Provided,
however, that the minimum compensation payable to a volunteer firefighter,
volunteer member of an organized rescue squad, an authorized pickup
firefighter of the North Carolina Forest Service of the Department of
Agriculture and Consumer Services, when that individual is engaged in
emergency fire suppression activities for the North Carolina Forest Service, a
sworn member of an auxiliary police department organized pursuant to G.S.
160A-282, or senior members of the State Civil Air Patrol shall be sixty-six
and two-thirds percent (66 2/3%) of the maximum weekly benefit established
in G.S. 97-29.
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(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Injury. – "Injury and personal injury" shall mean only injury by accident
arising out of and in the course of the employment, and shall not include a
disease in any form, except where it results naturally and unavoidably from
the accident. With respect to back injuries, however, where injury to the back
arises out of and in the course of the employment and is the direct result of a
specific traumatic incident of the work assigned, "injury by accident" shall be
construed to include any disabling physical injury to the back arising out of
and causally related to such incident. Injury shall include breakage or damage
to eyeglasses, hearing aids, dentures, or other prosthetic devices which
function as part of the body; provided, however, that eyeglasses and hearing
aids will not be replaced, repaired, or otherwise compensated for unless injury
to them is incidental to a compensable injury.
Carrier. – The term "carrier" or "insurer" means any person or fund authorized
under G.S. 97-93 to insure under this Article, and includes self-insurers.
Commission. – The term "Commission" means the North Carolina Industrial
Commission, to be created under the provisions of this Article.
Disability. – The term "disability" means incapacity because of injury to earn
the wages which the employee was receiving at the time of injury in the same
or any other employment.
Death. – The term "death" as a basis for a right to compensation means only
death resulting from an injury.
Compensation. – The term "compensation" means the money allowance
payable to an employee or to his dependents as provided for in this Article,
and includes funeral benefits provided herein.
Child, Grandchild, Brother, Sister. – The term "child" shall include a
posthumous child, a child legally adopted prior to the injury of the employee,
and a stepchild or acknowledged child born out of wedlock dependent upon
the deceased, but does not include married children unless wholly dependent
upon him. "Grandchild" means a child, as defined in this subdivision, of a
child, as defined in this subdivision. "Brother" and "sister" include
stepbrothers and stepsisters, half brothers and half sisters, and brothers and
sisters by adoption, but does not include married brothers nor married sisters
unless wholly dependent on the employee. "Child," "grandchild," "brother,"
and "sister" include only persons who at the time of the death of the deceased
employee are under 18 years of age.
Parent. – The term "parent" includes stepparents and parents by adoption,
parents-in-law, and any person who for more than three years prior to the
death of the deceased employee stood in the place of a parent to him, if
dependent on the injured employee.
Widow. – The term "widow" includes only the decedent's wife living with or
dependent for support upon him at the time of his death; or living apart for
justifiable cause or by reason of his desertion at such time.
Widower. – The term "widower" includes only the decedent's husband living
with or dependent for support upon her at the time of her death or living apart
for justifiable cause or by reason of her desertion at such time.
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(16)
(17)
(18)
(19)
(20)
Adoption. – The term "adoption" or "adopted" means legal adoption prior to
the time of the injury.
Singular. – The singular includes the plural and the masculine includes the
feminine and neuter.
Hernia. – In all claims for compensation for hernia or rupture, resulting from
injury by accident arising out of and in the course of the employee's
employment, it must be definitely proven to the satisfaction of the Industrial
Commission:
a.
That there was an injury resulting in hernia or rupture.
b.
That the hernia or rupture appeared suddenly.
c.
Repealed by Session Laws 1987, c. 729, s. 2.
d.
That the hernia or rupture immediately followed an accident. Provided,
however, a hernia shall be compensable under this Article if it arises
out of and in the course of the employment and is the direct result of a
specific traumatic incident of the work assigned.
e.
That the hernia or rupture did not exist prior to the accident for which
compensation is claimed.
All hernia or rupture, inguinal, femoral or otherwise, so proven to be the
result of an injury by accident arising out of and in the course of employment,
shall be treated in a surgical manner by a radical operation. If death results
from such operation, the death shall be considered as a result of the injury, and
compensation paid in accordance with the provisions of G.S. 97-38. In
nonfatal cases, if it is shown by special examination, as provided in G.S.
97-27, that the injured employee has a disability resulting after the operation,
compensation for such disability shall be paid in accordance with the
provisions of this Article.
In case the injured employee refuses to undergo the radical operation for
the cure of said hernia or rupture, no compensation will be allowed during the
time such refusal continues. If, however, it is shown that the employee has
some chronic disease, or is otherwise in such physical condition that the
Commission considers it unsafe for the employee to undergo said operation,
the employee shall be paid compensation in accordance with the provisions of
this Article.
Medical Compensation. – The term "medical compensation" means medical,
surgical, hospital, nursing, and rehabilitative services, including, but not
limited to, attendant care services prescribed by a health care provider
authorized by the employer or subsequently by the Commission, vocational
rehabilitation, and medicines, sick travel, and other treatment, including
medical and surgical supplies, as may reasonably be required to effect a cure
or give relief and for such additional time as, in the judgment of the
Commission, will tend to lessen the period of disability; and any original
artificial members as may reasonably be necessary at the end of the healing
period and the replacement of such artificial members when reasonably
necessitated by ordinary use or medical circumstances.
Health care provider. – The term "health care provider" means physician,
hospital, pharmacy, chiropractor, nurse, dentist, podiatrist, physical therapist,
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(21)
(22)
rehabilitation specialist, psychologist, and any other person providing medical
care pursuant to this Article.
Managed care organization. – The term "managed care organization" means a
preferred provider organization or a health maintenance organization
regulated under Chapter 58 of the General Statutes. "Managed care
organization" also means a preferred provider benefit plan of an insurance
company, hospital, or medical service corporation in which utilization review
or quality management programs are used to manage the provision of health
care services and benefits under this Chapter.
Suitable employment. – The term "suitable employment" means employment
offered to the employee or, if prohibited by the Immigration and Nationality
Act, 8 U.S.C. § 1324a, employment available to the employee that (i) prior to
reaching maximum medical improvement is within the employee's work
restrictions, including rehabilitative or other noncompetitive employment with
the employer of injury approved by the employee's authorized health care
provider or (ii) after reaching maximum medical improvement is employment
that the employee is capable of performing considering the employee's
preexisting and injury-related physical and mental limitations, vocational
skills, education, and experience and is located within a 50-mile radius of the
employee's residence at the time of injury or the employee's current residence
if the employee had a legitimate reason to relocate since the date of injury. No
one factor shall be considered exclusively in determining suitable
employment. (1929, c. 120, s. 2; 1933, c. 448; 1939, c. 277, s. 1; 1943, c. 543;
c. 672, s. 1; 1945, c. 766; 1947, c. 698; 1949, c. 399; 1953, c. 619; 1955, c.
644; c. 1026, s. 1; c. 1055; 1957, c. 95; 1959, c. 289; 1961, cc. 231, 235; 1967,
c. 1229, s. 1; 1969, c. 206, s. 2; c. 707; 1971, c. 284, s. 1; c. 1231, s. 1; 1973,
c. 521, ss. 1, 2; c. 763, ss. 1-3; c. 1291, s. 14; 1975, c. 266, s. 1; c. 284, ss. 2,
3; c. 288; c. 718, s. 3; c. 817, s. 1; 1977, c. 419; c. 893, s. 1; 1979, cc. 86, 374;
c. 516, ss. 4, 5; c. 714, s. 3; 1981, c. 421, ss. 1, 2; 1983, c. 833; 1983 (Reg.
Sess., 1984), c. 1042, s. 1; 1985, cc. 133, 144; 1987, c. 729, ss. 1, 2; 1991, c.
703, s. 1; 1993, c. 389, s. 3; 1993 (Reg. Sess., 1994), c. 679, ss. 2.6, 10.7;
1995, c. 517, s. 35; 1999-219, s. 4.2; 1999-418, s. 1; 1999-456, s. 33(c);
2001-204, ss. 1, 1.1, 2; 2003-156, s. 1; 2009-281, s. 1; 2011-145, s.
13.25(mm), (xx); 2011-287, s. 2; 2013-155, s. 5; 2013-198, s. 25; 2014-64, s.
2(c); 2015-286, s. 2.3.)
§ 97-3. Presumption that all employers and employees have come under provisions of
Article.
From and after January 1, 1975, every employer and employee, as hereinbefore defined and
except as herein stated, shall be presumed to have accepted the provisions of this Article
respectively to pay and accept compensation for personal injury or death by accident arising out
of and in the course of his employment and shall be bound thereby. (1929, c. 120, s. 4; 1973, c.
1291, s. 1.)
§ 97-4: Repealed by Session Laws 1973, c. 1291, s. 2.
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§ 97-5. Presumption as to contract of service.
Every contract of service between any employer and employee covered by this Article,
written or implied, now in operation or made or implied prior to July 1, 1929, shall, after that
date, be presumed to continue, subject to the provisions of this Article; and every such contract
made subsequent to that date shall be presumed to have been made subject to the provisions of
this Article. (1929, c. 120, s. 6; 1973, c. 1291, s. 3.)
§ 97-5.1. Presumption that taxicab drivers are independent contractors.
(a)
It shall be a rebuttable presumption under this Chapter that any person who operates,
and who has an ownership or leasehold interest in, a passenger motor vehicle that is operated as a
taxicab is an independent contractor for the purposes of this Chapter and not an employee as
defined in G.S. 97-2. The presumption is not rebutted solely (i) because the operator is required
to comply with rules and regulations imposed on taxicabs by the local governmental unit that
licenses companies, taxicabs, or operators or (ii) because a taxicab accepts a trip request to be at
a specific place at a specific time, but the presumption may be rebutted by application of the
common law test for determining employment status.
(b)
The following definitions apply in this section:
(1)
Lease. – A contract under which the lessor provides a vehicle to a lessee for
consideration.
(2)
Leasehold. – Includes, but is not limited to, a lease for a shift or a longer
period.
(3)
Passenger motor vehicle that is operated as a taxicab. – Any vehicle that:
a.
Has a passenger seating capacity that does not exceed seven persons;
and
b.
Is transporting persons, property, or both on a route that begins or ends
in this State and either:
1.
Carries passengers for hire when the destination and route
traveled may be controlled by a passenger and the fare is
calculated on the basis of any combination of an initial fee,
distance traveled, or waiting time; or
2.
Is in use under a contract between the operator and a third party
to provide specific service to transport designated passengers
or to provide errand services to locations selected by the third
party. (2013-413, s. 17(a).)
§ 97-6. No special contract can relieve an employer of obligations.
No contract or agreement, written or implied, no rule, regulation, or other device shall in any
manner operate to relieve an employer in whole or in part, of any obligation created by this
Article, except as herein otherwise expressly provided. (1929, c. 120, s. 7.)
§ 97-6.1: Repealed by 1991 (Regular Session, 1992), c. 1021, s. 4.
§ 97-7. State or subdivision and employees thereof.
Neither the State nor any municipal corporation within the State, nor any political
subdivision thereof, nor any employee of the State or of any such corporation or subdivision,
shall have the right to reject the provisions of this Article relative to payment and acceptance of
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compensation, and G.S. 97-100(c) does not apply to them: Provided, that all such corporations or
subdivisions are hereby authorized to self-insure or purchase insurance to secure its liability
under this Article and to include thereunder the liability of such subordinate governmental
agencies as the county board of health, the school board, and other political and quasi-political
subdivisions supported in whole or in part by the municipal corporation or political subdivision
of the State. Each municipality is authorized to make appropriations for these purposes and to
fund them by levy of property taxes pursuant to G.S. 153A-149 and G.S. 160A-209 and by the
allocation of other revenues whose use is not otherwise restricted by law. (1929, c. 120, s. 8;
1931, c. 274, s. 1; 1945, c. 766; 1957, c. 1396, s. 1; 1961, c. 1200; 1973, c. 803, s. 34; c. 1291, s.
4; 2006-105, s. 1.10.)
§ 97-8. Prior injuries and deaths unaffected.
The provisions of this Article shall not apply to injuries or deaths, nor to accidents which
occurred prior to July 1, 1929. (1929, c. 120, s. 9.)
§ 97-9. Employer to secure payment of compensation.
Every employer subject to the compensation provisions of this Article shall secure the
payment of compensation to his employees in the manner hereinafter provided; and while such
security remains in force, he or those conducting his business shall only be liable to any
employee for personal injury or death by accident to the extent and in the manner herein
specified. (1929, c. 120, s. 10; 1973, c. 1291, s. 5.)
§ 97-10. Repealed by Session Laws 1959, c. 1324.
§ 97-10.1. Other rights and remedies against employer excluded.
If the employee and the employer are subject to and have complied with the provisions of
this Article, then the rights and remedies herein granted to the employee, his dependents, next of
kin, or personal representative shall exclude all other rights and remedies of the employee, his
dependents, next of kin, or representative as against the employer at common law or otherwise
on account of such injury or death. (1929, c. 120, s. 11; 1933, c. 449, s. 1; 1943, c. 622; 1959, c.
1324; 1973, c. 1291, s. 6.)
§ 97-10.2. Rights under Article not affected by liability of third party; rights and remedies
against third parties.
(a)
The right to compensation and other benefits under this Article for disability,
disfigurement, or death shall not be affected by the fact that the injury or death was caused under
circumstances creating a liability in some person other than the employer to pay damages
therefor, such person hereinafter being referred to as the "third party." The respective rights and
interests of the employee-beneficiary under this Article, the employer, and the employer's
insurance carrier, if any, in respect of the common-law cause of action against such third party
and the damages recovered shall be as set forth in this section.
(b)
The employee, or his personal representative if he be dead, shall have the exclusive
right to proceed to enforce the liability of the third party by appropriate proceedings if such
proceedings are instituted not later than 12 months after the date of injury or death, whichever is
later. During said 12-month period, and at any time thereafter if summons is issued against the
third party during said 12-month period, the employee or his personal representative shall have
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the right to settle with the third party and to give a valid and complete release of all claims to the
third party by reason of such injury or death, subject to the provisions of (h) below.
(c)
If settlement is not made and summons is not issued within said 12-month period, and
if employer shall have filed with the Industrial Commission a written admission of liability for
the benefits provided by this Chapter, then either the employee or the employer shall have the
right to proceed to enforce the liability of the third party by appropriate proceedings; either shall
have the right to settle with the third party and to give a valid and complete release of all claims
to the third party by reason of such injury or death, subject to the provisions of (h) below.
Provided that 60 days before the expiration of the period fixed by the applicable statute of
limitations if neither the employee nor the employer shall have settled with or instituted
proceedings against the third party, all such rights shall revert to the employee or his personal
representative.
(d)
The person in whom the right to bring such proceeding or make settlement is vested
shall, during the continuation thereof, also have the exclusive right to make settlement with the
third party and the release of the person having the right shall fully acquit and discharge the third
party except as provided by (h) below. A proceeding so instituted by the person having the right
shall be brought in the name of the employee or his personal representative and the employer or
the insurance carrier shall not be a necessary or proper party thereto. If the employee or his
personal representative shall refuse to cooperate with the employer by being the party plaintiff,
then the action shall be brought in the name of the employer and the employee or his personal
representative shall be made a party plaintiff or party defendant by order of court.
(e)
The amount of compensation and other benefits paid or payable on account of such
injury or death shall be admissible in evidence in any proceeding against the third party. In the
event that said amount of compensation and other benefits is introduced in such a proceeding the
court shall instruct the jury that said amount will be deducted by the court from any amount of
damages awarded to the plaintiff. If the third party defending such proceeding, by answer duly
served on the employer, sufficiently alleges that actionable negligence of the employer joined
and concurred with the negligence of the third party in producing the injury or death, then an
issue shall be submitted to the jury in such case as to whether actionable negligence of employer
joined and concurred with the negligence of the third party in producing the injury or death. The
employer shall have the right to appear, to be represented, to introduce evidence, to
cross-examine adverse witnesses, and to argue to the jury as to this issue as fully as though he
were a party although not named or joined as a party to the proceeding. Such issue shall be the
last of the issues submitted to the jury. If the verdict shall be that actionable negligence of the
employer did join and concur with that of the third party in producing the injury or death, then
the court shall reduce the damages awarded by the jury against the third party by the amount
which the employer would otherwise be entitled to receive therefrom by way of subrogation
hereunder and the entire amount recovered, after such reduction, shall belong to the employee or
his personal representative free of any claim by the employer and the third party shall have no
further right by way of contribution or otherwise against the employer, except any right which
may exist by reason of an express contract of indemnity between the employer and the third
party, which was entered into prior to the injury to the employee. In the event that the court
becomes aware that there is an express contract of indemnity between the employer and the third
party the court may in the interest of justice exclude the employer from the trial of the claim
against the third party and may meet the issue of the actionable negligence of the employer to the
jury in a separate hearing.
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(f)
(1)
If the employer has filed a written admission of liability for benefits under this
Chapter with, or if an award final in nature in favor of the employee has been
entered by the Industrial Commission, then any amount obtained by any
person by settlement with, judgment against, or otherwise from the third party
by reason of such injury or death shall be disbursed by order of the Industrial
Commission for the following purposes and in the following order of priority:
a.
First to the payment of actual court costs taxed by judgment and/or
reasonable expenses incurred by the employee in the litigation of the
third-party claim.
b.
Second to the payment of the fee of the attorney representing the
person making settlement or obtaining judgment, and except for the
fee on the subrogation interest of the employer such fee shall not be
subject to the provisions of G.S. 97-90 but shall not exceed one third
of the amount obtained or recovered of the third party.
c.
Third to the reimbursement of the employer for all benefits by way of
compensation or medical compensation expense paid or to be paid by
the employer under award of the Industrial Commission.
d.
Fourth to the payment of any amount remaining to the employee or his
personal representative.
(2)
The attorney fee paid under (f)(1) shall be paid by the employee and the
employer in direct proportion to the amount each shall receive under (f)(1)c
and (f)(1)d hereof and shall be deducted from such payments when
distribution is made.
(g)
The insurance carrier affording coverage to the employer under this Chapter shall be
subrogated to all rights and liabilities of the employer hereunder but this shall not be construed as
conferring any other or further rights upon such insurance carrier than those herein conferred
upon the employer, anything in the policy of insurance to the contrary notwithstanding.
(h)
In any proceeding against or settlement with the third party, every party to the claim
for compensation shall have a lien to the extent of his interest under (f) hereof upon any payment
made by the third party by reason of such injury or death, whether paid in settlement, in
satisfaction of judgment, as consideration for covenant not to sue, or otherwise and such lien
may be enforced against any person receiving such funds. Neither the employee or his personal
representative nor the employer shall make any settlement with or accept any payment from the
third party without the written consent of the other and no release to or agreement with the third
party shall be valid or enforceable for any purpose unless both employer and employee or his
personal representative join therein; provided, that this sentence shall not apply:
(1)
If the employer is made whole for all benefits paid or to be paid by him under
this Chapter less attorney's fees as provided by (f)(1) and (2) hereof and the
release to or agreement with the third party is executed by the employee; or
(2)
If either party follows the provisions of subsection (j) of this section.
(i)
Institution of proceedings against or settlement with the third party, or acceptance of
benefits under this Chapter, shall not in any way or manner affect any other remedy which any
party to the claim for compensation may have except as otherwise specifically provided in this
Chapter, and the exercise of one remedy shall not in any way or manner be held to constitute an
election of remedies so as to bar the other.
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(j)
Notwithstanding any other subsection in this section, in the event that a judgment is
obtained by the employee in an action against a third party, or in the event that a settlement has
been agreed upon by the employee and the third party, either party may apply to the resident
superior court judge of the county in which the cause of action arose or where the injured
employee resides, or to a presiding judge of either district, to determine the subrogation amount.
After notice to the employer and the insurance carrier, after an opportunity to be heard by all
interested parties, and with or without the consent of the employer, the judge shall determine, in
his discretion, the amount, if any, of the employer's lien, whether based on accrued or
prospective workers' compensation benefits, and the amount of cost of the third-party litigation
to be shared between the employee and employer. The judge shall consider the anticipated
amount of prospective compensation the employer or workers' compensation carrier is likely to
pay to the employee in the future, the net recovery to plaintiff, the likelihood of the plaintiff
prevailing at trial or on appeal, the need for finality in the litigation, and any other factors the
court deems just and reasonable, in determining the appropriate amount of the employer's lien. If
the matter is pending in the federal district court such determination may be made by a federal
district court judge of that division. (1929, c. 120, s. 11; 1933, c. 449, s. 1; 1943, c. 622; 1959, c.
1324; 1963, c. 450, s. 1; 1971, c. 171, s. 1; 1979, c. 865, s. 1; 1983, c. 645, ss. 1, 2; 1991, c. 408,
s. 1; c. 703, s. 2; 1999-194, s. 1; 2004-199, s. 13(b).)
§ 97-10.3. Minors illegally employed.
In any case where an employer and employee are subject to the provisions of this Chapter,
any injury to a minor while employed contrary to the laws of this State shall be compensable
under this Chapter as if said minor were an adult, subject to the other provisions of this Chapter.
(1929, c. 120, s. 11; 1933, c. 449, s. 1; 1943, c. 622; 1959, c. 1324.)
§ 97-11. Employer not relieved of statutory duty.
Nothing in this Article shall be construed to relieve any employer or employee from penalty
for failure or neglect to perform any statutory duty. (1929, c. 120, s. 12.)
§ 97-12. Use of intoxicant or controlled substance; willful neglect; willful disobedience of
statutory duty, safety regulation or rule.
No compensation shall be payable if the injury or death to the employee was proximately
caused by:
(1)
His intoxication, provided the intoxicant was not supplied by the employer or
his agent in a supervisory capacity to the employee; or
(2)
His being under the influence of any controlled substance listed in the North
Carolina Controlled Substances Act, G.S. 90-86, et seq., where such
controlled substance was not by prescription by a practitioner; or
(3)
His willful intention to injure or kill himself or another.
When the injury or death is caused by the willful failure of the employer to comply with any
statutory requirement or any lawful order of the Commission, compensation shall be increased
ten percent (10%). When the injury or death is caused by the willful failure of the employee to
use a safety appliance or perform a statutory duty or by the willful breach of any rule or
regulation adopted by the employer and approved by the Commission and brought to the
knowledge of the employee prior to the injury compensation shall be reduced ten percent (10%).
The burden of proof shall be upon him who claims an exemption or forfeiture under this section.
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"Intoxication" and "under the influence" shall mean that the employee shall have consumed a
sufficient quantity of intoxicating beverage or controlled substance to cause the employee to lose
the normal control of his or her bodily or mental faculties, or both, to such an extent that there
was an appreciable impairment of either or both of these faculties at the time of the injury.
A result consistent with "intoxication" or being "under the influence" from a blood or other
medical test conducted in a manner generally acceptable to the scientific community and
consistent with applicable State and federal law, if any, shall create a rebuttable presumption of
impairment from the use of alcohol or a controlled substance. (1929, c. 120, s. 13; 1975, c. 740;
2005-448, s. 2.)
§ 97-12.1. Willful misrepresentation in applying for employment.
No compensation shall be allowed under this Article for injury by accident or occupational
disease if the employer proves that (i) at the time of hire or in the course of entering into
employment, (ii) at the time of receiving notice of the removal of conditions from a conditional
offer of employment, or (iii) during the course of a post-offer medical examination:
(1)
The employee knowingly and willfully made a false representation as to the
employee's physical condition;
(2)
The employer relied upon one or more false representations by the employee,
and the reliance was a substantial factor in the employer's decision to hire the
employee; and
(3)
There was a causal connection between false representation by the employee
and the injury or occupational disease. (2011-287, s. 3.)
§ 97-13. Exceptions from provisions of Article.
(a)
Employees of Certain Railroads. – This Article shall not apply to railroads or railroad
employees nor in any way repeal, amend, alter or affect Article 8 of Chapter 60 or any section
thereof relating to the liability of railroads for injuries to employees, nor upon the trial of any
action in tort for injuries not coming under the provisions of this Article, shall any provision
herein be placed in evidence or be permitted to be argued to the jury. Provided, however, that the
foregoing exemption to railroads and railroad employees shall not apply to employees of a
State-owned railroad company, as defined in G.S. 124-11, or to electric street railroads or
employees thereof; and this Article shall apply to electric street railroads and employees thereof
and to this extent the provisions of Article 8 of Chapter 60 are hereby amended.
(b)
Casual Employment, Domestic Servants, Farm Laborers, Federal Government,
Employer of Less than Three Employees. – This Article shall not apply to casual employees,
farm laborers when fewer than 10 full-time nonseasonal farm laborers are regularly employed by
the same employer, federal government employees in North Carolina, and domestic servants, nor
to employees of such persons, nor to any person, firm or private corporation that has regularly in
service less than three employees in the same business within this State, except that any
employer without regard to number of employees, including an employer of domestic servants,
farm laborers, or one who previously had exempted himself, who has purchased workers'
compensation insurance to cover his compensation liability shall be conclusively presumed
during life of the policy to have accepted the provisions of this Article from the effective date of
said policy and his employees shall be so bound unless waived as provided in this Article;
provided however, that this Article shall apply to all employers of one or more employees who
are employed in activities which involve the use or presence of radiation.
NC General Statutes - Chapter 97
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(c)
Prisoners. – This Article shall not apply to prisoners being worked by the State or any
subdivision thereof, except to the following extent: Whenever any prisoner assigned to the
Division of Adult Correction of the Department of Public Safety shall suffer accidental injury or
accidental death arising out of and in the course of the employment to which he had been
assigned, if there be death or if the results of such injury continue until after the date of the
lawful discharge of such prisoner to such an extent as to amount to a disability as defined in this
Article, then such discharged prisoner or the dependents or next of kin of such discharged
prisoner may have the benefit of this Article by applying to the Industrial Commission as any
other employee; provided, such application is made within 12 months from the date of the
discharge; and provided further that the maximum compensation to any prisoner or to the
dependents or next of kin of any deceased prisoner shall not exceed thirty dollars ($30.00) per
week and the period of compensation shall relate to the date of his discharge rather than the date
of the accident. If any person who has been awarded compensation under the provisions of this
subsection shall be recommitted to prison upon conviction of an offense committed subsequent
to the award, such compensation shall immediately cease. Any awards made under the terms of
this subsection shall be paid by the Department of Public Safety from the funds available for the
operation of the Division of Adult Correction of the Department of Public Safety. The provisions
of G.S. 97-10.1 and 97-10.2 shall apply to prisoners and discharged prisoners entitled to
compensation under this subsection and to the State in the same manner as said section applies to
employees and employers.
(d)
Sellers of Agricultural Products. – This Article shall not apply to persons, firms or
corporations engaged in selling agricultural products for the producers thereof on commission or
for other compensation, paid by the producers, provided the product is prepared for sale by the
producer. (1929, c. 120, s. 14; 1933, c. 401; 1935, c. 150; 1941, c. 295; 1943, c. 543; 1945, c.
766; 1957, c. 349, s. 10; c. 809; 1967, c. 996, s. 13; 1971, c. 284, s. 2; c. 1176; 1975, c. 718, s. 3;
1979, c. 247, s. 1; c. 714, s. 2; 1981, c. 378, s. 1; 1983 (Reg. Sess., 1984), c. 1042, s. 2; 1987, c.
729, s. 3; 2000-146, s. 11; 2011-145, s. 19.1(h); 2012-83, s. 34.)
§§ 97-14 through 97-16. Repealed by Session Laws 1973, c. 1291, ss. 7-9.
§ 97-17. Settlements allowed in accordance with Article.
(a)
This article does not prevent settlements made by and between the employee and
employer so long as the amount of compensation and the time and manner of payment are in
accordance with the provisions of this Article. A copy of a settlement agreement shall be filed by
the employer with and approved by the Commission. No party to any agreement for
compensation approved by the Commission shall deny the truth of the matters contained in the
settlement agreement, unless the party is able to show to the satisfaction of the Commission that
there has been error due to fraud, misrepresentation, undue influence or mutual mistake, in which
event the Commission may set aside the agreement. Except as provided in this subsection, the
decision of the Commission to approve a settlement agreement is final and is not subject to
review or collateral attack.
(b)
The Commission shall not approve a settlement agreement under this section, unless
all of the following conditions are satisfied:
(1)
The settlement agreement is deemed by the Commission to be fair and just,
and that the interests of all of the parties and of any person, including a health
NC General Statutes - Chapter 97
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benefit plan that paid medical expenses of the employee have been
considered.
(2)
The settlement agreement contains a list of all of the known medical expenses
of the employee related to the injury to the date of the settlement agreement,
including medical expenses that the employer or carrier disputes, and a list of
medical expenses, if any, that will be paid by the employer under the
settlement agreement.
(3)
The settlement agreement contains a finding that the positions of all of the
parties to the agreement are reasonable as to the payment of medical expenses.
It is not necessary, however, to satisfy the condition in subdivision (2) of this subsection when in
the settlement agreement the employer agrees to pay all medical expenses of the employee
related to the injury to the date of the settlement agreement.
(c)
In determining whether the positions of all of the parties to the agreement are
reasonable as to the payment of medical expenses under subdivision (3) of subsection (b) of this
section, the Commission shall consider all of the following:
(1)
Whether the employer admitted or reasonably denied the employee's claim for
compensation.
(2)
The amount of all of the known medical expenses of the employee related to
the injury to the date of the settlement agreement, including medical expenses
that the employer or carrier disputes.
(3)
The need for finality in the litigation.
(d)
Nothing in this section shall be construed to limit the application of G.S. 44-49 and
G.S. 44-50 to funds in compensation for settlement under this section.
(e)
Nothing in this section prevents the parties from reaching a separate
contemporaneous agreement resolving issues not covered by this Article. (1929, c. 120, s. 18;
1963, c. 436; 2001-216, s. 2; 2001-487, s. 102(b); 2005-448, s. 3; 2011-287, s. 4.)
§ 97-18.
Prompt payment of compensation required; installments; payment without
prejudice; notice to Commission; penalties.
(a)
Compensation under this Article shall be paid periodically, promptly and directly to
the person entitled thereto unless otherwise specifically provided.
(b)
When the employer or insurer admits the employee's right to compensation, the first
installment of compensation payable by the employer shall become due on the fourteenth day
after the employer has written or actual notice of the injury or death, on which date all
compensation then due shall be paid. Compensation thereafter shall be paid in installments
weekly except where the Commission determines that payment in installments should be made
monthly or at some other period. Upon paying the first installment of compensation and upon
suspending, reinstating, changing, or modifying such compensation for any cause, the insurer
shall immediately notify the Commission, on a form prescribed by the Commission, that
compensation has begun, or has been suspended, reinstated, changed, or modified. A copy of
each notice shall be provided to the employee. The first notice of payment to the Commission
shall contain the date and nature of the injury, the average weekly wages of the employee, the
weekly compensation rate, the date the disability resulting from the injury began, and the date
compensation commenced.
(c)
If the employer or insurer denies the employee's right to compensation, the employer
or insurer shall notify the Commission, on or before the fourteenth day after it has written or
NC General Statutes - Chapter 97
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actual notice of the injury or death, or within such reasonable additional time as the Commission
may allow, and advise the employee in writing of its refusal to pay compensation on a form
prescribed by the Commission. This notification shall (i) include the name of the employee, the
name of the employer, the date of the alleged injury or death, the insurer on the risk, if any, and a
detailed statement of the grounds upon which the right to compensation is denied, and (ii) advise
the employee of the employee's right to request a hearing pursuant to G.S. 97-83. If the employer
or insurer, in good faith, is without sufficient information to admit the employee's right to
compensation, the employer or insurer may deny the employee's right to compensation.
(d)
In any claim for compensation in which the employer or insurer is uncertain on
reasonable grounds whether the claim is compensable or whether it has liability for the claim
under this Article, the employer or insurer may initiate compensation payments without
prejudice and without admitting liability. The initial payment shall be accompanied by a form
prescribed by and filed with the Commission, stating that the payments are being made without
prejudice. Payments made pursuant to this subsection may continue until the employer or insurer
contests or accepts liability for the claim or 90 days from the date the employer has written or
actual notice of the injury or death, whichever occurs first, unless an extension is granted
pursuant to this section. Prior to the expiration of the 90-day period, the employer or insurer may
upon reasonable grounds apply to the Commission for an extension of not more than 30 days.
The initiation of payment does not affect the right of the employer or insurer to continue to
investigate or deny the compensability of the claim or its liability therefor during this period. If
at any time during the 90-day period or extension thereof, the employer or insurer contests the
compensability of the claim or its liability therefor, it may suspend payment of compensation and
shall promptly notify the Commission and the employee on a form prescribed by the
Commission. The employer or insurer must provide on the prescribed form a detailed statement
of its grounds for denying compensability of the claim or its liability therefor. If the employer or
insurer does not contest the compensability of the claim or its liability therefor within 90 days
from the date it first has written or actual notice of the injury or death, or within such additional
period as may be granted by the Commission, it waives the right to contest the compensability of
and its liability for the claim under this Article. However, the employer or insurer may contest
the compensability of or its liability for the claim after the 90-day period or extension thereof
when it can show that material evidence was discovered after that period that could not have
been reasonably discovered earlier, in which event the employer or insurer may terminate or
suspend compensation subject to the provisions of G.S. 97-18.1.
(e)
The first installment of compensation payable under the terms of an award by the
Commission, or under the terms of a judgment of the court upon an appeal from such an award,
shall become due 10 days from the day following expiration of the time for appeal from the
award or judgment or the day after notice waiving the right of appeal by all parties has been
received by the Commission, whichever is sooner. Thereafter compensation shall be paid in
installments weekly, except where the Commission determines that payment in installments shall
be made monthly or in some other manner.
(f)
The employer's or insurer's grounds for contesting the employee's claim or its liability
therefor as specified in the notice suspending compensation under subsection (d) of this section
are the only bases for the employer's or insurer's defense on the issue of compensability in a
subsequent proceeding, unless the defense is based on newly discovered material evidence that
could not reasonably have been discovered prior to the notice suspending compensation.
NC General Statutes - Chapter 97
17
(g)
If any installment of compensation is not paid within 14 days after it becomes due,
there shall be added to such unpaid installment an amount equal to ten per centum (10%) thereof,
which shall be paid at the same time as, but in addition to, such installment, unless such
nonpayment is excused by the Commission after a showing by the employer that owing to
conditions over which he had no control such installment could not be paid within the period
prescribed for the payment.
(h)
Within 16 days after final payment of compensation has been made, the employer or
insurer shall send to the Commission and the employee a notice, in accordance with a form
prescribed by the Commission, stating that such final payment has been made, the total amount
of compensation paid, the name of the employee and of any other person to whom compensation
has been paid, the date of the injury or death, and the date to which compensation has been paid.
If the employer or insurer fails to so notify the Commission or the employee within such time,
the Commission shall assess against such employer or insurer a civil penalty in the amount of
twenty-five dollars ($25.00). The clear proceeds of civil penalties assessed pursuant to this
section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S.
115C-457.2.
(i)
If any bill for services rendered under G.S. 97-25 by any provider of health care is not
paid within 60 days after it has been approved by the Commission and returned to the
responsible party, or within 60 days after it was properly submitted, in accordance with the
provisions of this Article, to an insurer or managed care organization responsible for direct
reimbursement pursuant to G.S. 97-26(g), there shall be added to such unpaid bill an amount
equal to ten per centum (10%) thereof, which shall be paid at the same time as, but in addition to,
such medical bill, unless such late payment is excused by the Commission.
(j)
The employer or insurer shall promptly investigate each injury reported or known to
the employer and at the earliest practicable time shall admit or deny the employee's right to
compensation or commence payment of compensation as provided in subsections (b), (c), or (d)
of this section. When an employee files a claim for compensation with the Commission, the
Commission may order reasonable sanctions against an employer or insurer which does not,
within 30 days following notice from the Commission of the filing of a claim, or within such
reasonable additional time as the Commission may allow, do one of the following:
(1)
Notify the Commission and the employee in writing that it is admitting the
employee's right to compensation and, if applicable, satisfy the requirements
for payment of compensation under subsection (b) of this section.
(2)
Notify the Commission and the employee that it denies the employee's right to
compensation consistent with subsection (c) of this section.
(3)
Initiate payments without prejudice and without liability and satisfy the
requirements of subsection (d) of this section.
For purposes of this subsection, reasonable sanctions shall not prohibit the employer or insurer
from contesting the compensability of or its liability for the claim.
(k)
In addition to any other methods for reinstatement of compensation available under
the Act, whenever the employer or insurer has admitted the employee's right to compensation, or
liability has been established, the employee may move for reinstatement of compensation on a
form prescribed by the Commission. The form prescribed by the Commission shall contain the
reasons for the proposed reinstatement of compensation, be supported by available
documentation, and inform the employer of the employer's right to contest the reinstatement of
compensation by filing an objection in writing with the Commission within 14 days of the date
NC General Statutes - Chapter 97
18
the employee's notice is filed with the Commission or within such additional reasonable time as
the Commission may allow. If the employer or insurer contests the employee's request for
reinstatement, the Commission shall conduct an informal hearing by telephone with the parties or
their counsel. If either party objects to conducting the hearing by telephone, the Commission
may conduct the hearing in person in Raleigh or at another location selected by the Commission.
The parties shall be afforded an opportunity to state their position and to submit documentary
evidence at the informal hearing. The employee may waive the right to an informal hearing and
proceed to the formal hearing. The Commission's decision in the informal hearing is not binding
in the subsequent hearings. If the application for Reinstatement of Payment of Disability
Compensation is approved or not contested, then compensation shall be reinstated immediately
and continue until further order of the Commission. The employer or employee may request a
formal hearing pursuant to G.S. 97-83 on the Commission's decision approving or denying the
employee's application for reinstatement. A formal hearing under G.S. 97-83 ordered or
requested pursuant to this subsection shall be a hearing de novo on the employee's application for
reinstatement of compensation and may be scheduled by the Commission on a preemptive basis.
This subsection shall not apply to a request for a review of an award on the grounds of a change
in condition pursuant to G.S. 97-47. (1929, c. 120, s. 181/2; 1967, c. 1229, s. 2; 1979, c. 249, ss.
1, 2; c. 599; 1993 (Reg. Sess., 1994), c. 679, s. 3.1; 1998-215, s. 114; 2005-448, s. 4; 2006-264,
s. 91.7; 2011-287, s. 5; 2013-294, s. 3.)
§ 97-18.1. Termination or suspension of compensation benefits.
(a)
Payments of compensation pursuant to an award of the Commission shall continue
until the terms of the award have been fully satisfied.
(b)
An employer may terminate payment of compensation for total disability being paid
pursuant to G.S. 97-29 when the employee has returned to work for the same or a different
employer, subject to the provisions of G.S. 97-32.1, or when the employer contests a claim
pursuant to G.S. 97-18(d) within the time allowed thereunder. The employer shall promptly
notify the Commission and the employee, on a form prescribed by the Commission, of the
termination of compensation and the availability of trial return to work and additional
compensation due the employee for any partial disability.
(c)
An employer seeking to terminate or suspend compensation being paid pursuant to
G.S. 97-29 for a reason other than those specified in subsection (b) of this section shall notify the
employee and the employee's attorney of record in writing of its intent to do so on a form
prescribed by the Commission. A copy of the notice shall be filed with the Commission. This
form shall contain the reasons for the proposed termination or suspension of compensation, be
supported by available documentation, and inform the employee of the employee's right to
contest the termination or suspension by filing an objection in writing with the Commission
within 14 days of the date the employer's notice is filed with the Commission or within such
additional reasonable time as the Commission may allow.
(d)
If the employee fails to object to the employer's notice of proposed termination or
suspension within the time provided, the Commission may enter an appropriate order terminating
or suspending the compensation if it finds that there is a sufficient basis under this Article for
this action. If the employee files a timely objection to the employer's notice, the Commission
shall conduct an informal hearing by telephone with the parties or their counsel. If either party
objects to conducting the hearing by telephone, the Commission may conduct the hearing in
person in Raleigh or at another location selected by the Commission. The parties shall be
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19
afforded an opportunity to state their position and to submit documentary evidence at the
informal hearing. The employer may waive the right to an informal hearing and proceed to the
formal hearing. The informal hearing, whether by telephone or in person, shall be conducted
only on the issue of termination or suspension of compensation and shall be conducted within 25
days of the receipt by the Commission of the employer's notice to the employee unless this time
is extended by the Commission for good cause. The Commission shall issue a decision on the
employer's application for termination of compensation within five days after completion of the
informal hearing. The decision shall (i) approve the application, (ii) disapprove the application,
or (iii) state that the Commission is unable to reach a decision on the application in an informal
hearing, in which event the Commission shall schedule a formal hearing pursuant to G.S. 97-83
on the employer's application for termination of compensation. Compensation may be terminated
or suspended by the employer following an informal hearing only if its application is approved.
If the Commission was unable to reach a decision in the informal hearing, the employee's
compensation shall continue pending a decision by the Commission in the formal hearing. The
Commission's decision in the informal hearing is not binding in subsequent hearings.
The employer or the employee may request a formal hearing pursuant to G.S. 97-83 on the
Commission's decision approving or denying the employer's application for termination of
compensation. A formal hearing under G.S. 97-83 ordered or requested pursuant to this section
shall be a hearing de novo on the employer's application for termination or suspension of
compensation and may be scheduled by the Commission on a preemptive basis.
(e)
At an informal hearing on the issue of termination or suspension of compensation,
and at any subsequent hearing, the Commission may address related issues regarding the
selection of medical providers or treatment under G.S. 97-25, subject to exhaustion of the dispute
resolution procedures of a managed care organization pursuant to G.S. 97-25.2. (1993 (Reg.
Sess., 1994), c. 679, ss. 3.6, 10.9.)
§ 97-19. Liability of principal contractors; certificate that subcontractor has complied with
law; right to recover compensation of those who would have been liable; order of
liability.
Any principal contractor, intermediate contractor, or subcontractor who shall sublet any
contract for the performance of any work without obtaining from such subcontractor or obtaining
from the Industrial Commission a certificate, issued by a workers' compensation insurance
carrier, or a certificate of compliance issued by the Department of Insurance to a self-insured
subcontractor, stating that such subcontractor has complied with G.S. 97-93 for a specified term,
shall be liable, irrespective of whether such subcontractor has regularly in service fewer than
three employees in the same business within this State, to the same extent as such subcontractor
would be if he were subject to the provisions of this Article for the payment of compensation and
other benefits under this Article on account of the injury or death of any employee of such
subcontractor due to an accident arising out of and in the course of the performance of the work
covered by such subcontract. If the principal contractor, intermediate contractor or subcontractor
shall obtain such certificate at any time before subletting such contract to the subcontractor, he
shall not thereafter be held liable to any employee of such subcontractor for compensation or
other benefits under this Article and within the term specified by the certificate.
Notwithstanding the provisions of this section, any principal contractor, intermediate
contractor, or subcontractor who shall sublet any contract for the performance of work shall not
be held liable to any employee of such subcontractor if either (i) the subcontractor has a workers'
NC General Statutes - Chapter 97
20
compensation insurance policy in compliance with G.S. 97-93 in effect on the date of injury
regardless of whether the principal contractor, intermediate contractor, or subcontractor failed to
timely obtain a certificate from the subcontractor; or (ii) the policy expired or was cancelled
prior to the date of injury provided the principal contractor, intermediate contractor, or
subcontractor obtained a certificate at any time before subletting such contract to the
subcontractor and was unaware of the expiration or cancellation.
Any principal contractor, intermediate contractor, or subcontractor paying compensation or
other benefits under this Article, under the foregoing provisions of this section, may recover the
amount so paid from any person, persons, or corporation who independently of such provision,
would have been liable for the payment thereof.
Every claim filed with the Industrial Commission under this section shall be instituted
against all parties liable for payment, and said Commission, in its award, shall fix the order in
which said parties shall be exhausted, beginning with the immediate employer.
The principal or owner may insure any or all of his contractors and their employees in a
blanket policy, and when so insured such contractor's employees will be entitled to compensation
benefits regardless of whether the relationship of employer and employee exists between the
principal and the contractor. (1929, c. 120, s. 19; 1941, c. 358, s. 1; 1945, c. 766; 1973, c. 1291,
s. 10; 1979, c. 247, s. 2; 1987, c. 729, s. 4; 1989, c. 637; 1991, c. 703, s. 7; 1993 (Reg. Sess.,
1994), c. 679, s. 10.6; 1995, c. 517, s. 36; 1995 (Reg. Sess., 1996), c. 555, s. 1; 2013-413, s.
13(c).)
§ 97-19.1.
Truck, tractor, or truck tractor trailer driver's status as employee or
independent contractor.
(a)
An individual in the interstate or intrastate carrier industry who operates a truck,
tractor, or truck tractor trailer licensed by a governmental motor vehicle regulatory agency may
be an employee or an independent contractor under this Article dependent upon the application
of the common law test for determining employment status.
Any principal contractor, intermediate contractor, or subcontractor, irrespective of whether
such contractor regularly employs three or more employees, who contracts with an individual in
the interstate or intrastate carrier industry who operates a truck, tractor, or truck tractor trailer
licensed by the United States Department of Transportation and who has not secured the
payment of compensation in the manner provided for employers set forth in G.S. 97-93 for
himself personally and for his employees and subcontractors, if any, shall be liable as an
employer under this Article for the payment of compensation and other benefits on account of
the injury or death of the independent contractor and his employees or subcontractors due to an
accident arising out of and in the course of the performance of the work covered by such
contract.
(b)
Notwithstanding subsection (a) of this section, a principal contractor, intermediate
contractor, or subcontractor shall not be liable as an employer under this Article for the payment
of compensation on account of the injury or death of the independent contractor if the principal
contractor, intermediate contractor, or subcontractor (i) contracts with an independent contractor
who is an individual licensed by the United States Department of Transportation and (ii) the
independent contractor personally is operating the vehicle solely pursuant to that license.
(c)
The principal contractor, intermediate contractor, or subcontractor may insure any
and all of his independent contractors and their employees or subcontractors in a blanket policy,
NC General Statutes - Chapter 97
21
and when insured, the independent contractors, subcontractors, and employees will be entitled to
compensation benefits under the blanket policy.
A principal contractor, intermediate contractor, or subcontractor may include in the
governing contract with an independent contractor in the interstate or intrastate carrier industry
who operates a truck, tractor, or truck tractor trailer licensed by a governmental motor vehicle
regulatory agency an agreement for the independent contractor to reimburse the cost of covering
that independent contractor under the principal contractor's, intermediate contractor's, or
subcontractor's coverage of his business. (2003-235, s. 1; 2006-26, s. 1; 2006-259, s. 19.)
§ 97-20. Priority of compensation claims against assets of employer.
All rights of compensation granted by this Article shall have the same preference or priority
for the whole thereof against the assets of the employer as is allowed by law for any unpaid
wages for labor. (1929, c. 120, s. 20.)
§ 97-21. Claims unassignable and exempt from taxes and debts; agreement of employee to
contribute to premium or waive right to compensation void; unlawful deduction
by employer.
No claim for compensation under this Article shall be assignable, and all compensation and
claims therefor shall be exempt from all claims of creditors and from taxes.
No agreement by an employee to pay any portion of premium paid by his employer to a
carrier or to contribute to a benefit fund or department maintained by such employer for the
purpose of providing compensation or medical services and supplies as required by this Article
shall be valid, and any employer who makes a deduction for such purpose from the pay of any
employee entitled to the benefits of this Article shall be guilty of a Class 3 misdemeanor and
upon conviction thereof shall be punished only by a fine of not more than five hundred dollars
($500.00). No agreement by an employee to waive his right to compensation under this Chapter
shall be valid. (1929, c. 120, s. 21; 1993, c. 539, s. 677; 1994, Ex. Sess., c. 24, s. 14(c).)
§ 97-22. Notice of accident to employer.
Every injured employee or his representative shall immediately on the occurrence of an
accident, or as soon thereafter as practicable, give or cause to be given to the employer a written
notice of the accident, and the employee shall not be entitled to physician's fees nor to any
compensation which may have accrued under the terms of this Article prior to the giving of such
notice, unless it can be shown that the employer, his agent or representative, had knowledge of
the accident, or that the party required to give such notice had been prevented from doing so by
reason of physical or mental incapacity, or the fraud or deceit of some third person; but no
compensation shall be payable unless such written notice is given within 30 days after the
occurrence of the accident or death, unless reasonable excuse is made to the satisfaction of the
Industrial Commission for not giving such notice and the Commission is satisfied that the
employer has not been prejudiced thereby. (1929, c. 120, s. 22.)
§ 97-23. What notice is to contain; defects no bar; notice personally or by registered letter
or certified mail.
The notice provided in the foregoing section [G.S. 97-22] shall state in ordinary language the
name and address of the employee, the time, place, nature, and cause of the accident, and of the
NC General Statutes - Chapter 97
22
resulting injury or death; and shall be signed by the employee or by a person on his behalf, or, in
the event of his death, by any one or more of his dependents, or by a person in their behalf.
No defect or inaccuracy in the notice shall be a bar to compensation unless the employer
shall prove that his interest was prejudiced thereby, and then only to such extent as the prejudice.
Said notice shall be given personally to the employer or any of his agents upon whom a
summons in civil action may be served under the laws of the State, or may be sent by registered
letter or certified mail addressed to the employer at his last known residence or place of business.
(1929, c. 120, s. 23; 1959, c. 863, s. 1.)
§ 97-24. Right to compensation barred after two years; destruction of records.
(a)
The right to compensation under this Article shall be forever barred unless (i) a claim
or memorandum of agreement as provided in G.S. 97-82 is filed with the Commission or the
employee is paid compensation as provided under this Article within two years after the accident
or (ii) a claim or memorandum of agreement as provided in G.S. 97-82 is filed with the
Commission within two years after the last payment of medical compensation when no other
compensation has been paid and when the employer's liability has not otherwise been established
under this Article. The provisions of this subsection shall not limit the time otherwise allowed for
the filing of a claim for compensation for occupational disease in G.S. 97-58, but in no event
shall the time for filing a claim for compensation for occupational disease be less than the times
provided herein for filing a claim for an injury by accident.
(b)
If any claim for compensation is hereafter made upon the theory that such claim or
the injury upon which said claim is based is within the jurisdiction of the Industrial Commission
under the provisions of this Article, and if the Commission, or the appellate courts on appeal,
shall adjudge that such claim is not within the Article, the claimant, or if he dies, his personal
representative, shall have one year after the rendition of a final judgment in the case within
which to commence an action at law.
(c)
When all claims and reports required by this Article have been filed, and the cases
and records of which they are a part have been closed by proper reports, receipts, awards or
orders, these records, may after five years in the discretion of the Commission, with and by the
authorization and approval of the Department of Natural and Cultural Resources, be destroyed by
burning or otherwise. (1929, c. 120, s. 24; 1933, c. 449, s. 2; 1945, c. 766; 1955, c. 1026, s. 12;
1973, c. 476, s. 48; c. 1060, s. 1; 1991, c. 703, s. 8; 1993 (Reg. Sess., 1994), c. 679, s. 3.4;
2015-241, s. 14.30(s).)
§ 97-25. Medical treatment and supplies.
(a)
Medical compensation shall be provided by the employer.
(b)
Upon the written request of the employee to the employer, the employer may agree to
authorize and pay for a second opinion examination with a duly qualified physician licensed to
practice in North Carolina, or licensed in another state if agreed to by the parties or ordered by
the Commission. If, within 14 calendar days of the receipt of the written request, the request is
denied or the parties, in good faith, are unable to agree upon a health care provider to perform a
second opinion examination, the employee may request that the Industrial Commission order a
second opinion examination. The expense thereof shall be borne by the employer upon the same
terms and conditions as provided in this section for medical compensation.
(c)
Provided, however, if the employee so desires, an injured employee may select a
health care provider of the employee's own choosing to attend, prescribe, and assume the care
NC General Statutes - Chapter 97
23
and charge of the employee's case subject to the approval of the Industrial Commission. In
addition, in case of a controversy arising between the employer and the employee, the Industrial
Commission may order necessary treatment. In order for the Commission to grant an employee's
request to change treatment or health care provider, the employee must show by a preponderance
of the evidence that the change is reasonably necessary to effect a cure, provide relief, or lessen
the period of disability. When deciding whether to grant an employee's request to change
treatment or health care provider, the Commission may disregard or give less weight to the
opinion of a health care provider from whom the employee sought evaluation, diagnosis, or
treatment before the employee first requested authorization in writing from the employer,
insurer, or Commission.
(d)
The refusal of the employee to accept any medical compensation when ordered by the
Industrial Commission shall bar the employee from further compensation until such refusal
ceases, and no compensation shall at any time be paid for the period of suspension unless in the
opinion of the Industrial Commission the circumstances justified the refusal. Any order issued by
the Commission suspending compensation pursuant to G.S. 97-18.1 shall specify what action the
employee should take to end the suspension and reinstate the compensation.
(e)
If in an emergency on account of the employer's failure to provide medical
compensation, a physician other than provided by the employer is called to treat the injured
employee, the reasonable cost of such service shall be paid by the employer if so ordered by the
Industrial Commission.
(f)
In claims subject to G.S. 97-18(b) and (d), a party may file a motion as set forth in
this subsection regarding a request for medical compensation or a dispute involving medical
issues. The nonmoving party shall have the right to contest the motion. Motions and responses
shall be submitted contemporaneously via electronic mail to the Commission and to the opposing
party or the opposing party's attorney[, as follows]:
(1)
A party may file a motion with the Executive Secretary for an administrative
ruling regarding a request for medical compensation or a dispute involving
medical issues. The motion shall be decided administratively pursuant to rules
governing motions practices in contested cases. The Commission shall decide
the motion within 30 days of the filing of the motion unless an extension of
time to respond to the motion has been granted for good cause shown. Either
party may file a motion for reconsideration of the administrative order with
the Executive Secretary. Either party may request an expedited formal hearing
pursuant to G.S. 97-84 and subdivision (2) of this subsection to appeal the
decision of the Executive Secretary approving or denying the original motion
or the motion for reconsideration. Within five days of the filing of a request
for an expedited formal hearing pursuant to G.S. 97-84 and subdivision (2) of
this subsection to appeal the decision of the Executive Secretary, the
Commission shall assign a Deputy Commissioner to conduct the formal
hearing. The decision shall not be stayed during the pendency of an appeal
pursuant to G.S. 97-84 and subdivision (2) of this subsection except under
those circumstances set out in subdivision (4) of this subsection. A motion to
stay shall be filed with the Deputy Commissioner scheduled to conduct the
formal hearing pursuant to G.S. 97-84. Either party may appeal the decision of
the Deputy Commissioner pursuant to G.S. 97-84 to the Full Commission
pursuant to G.S. 97-85. The decision of the Deputy Commissioner shall not be
NC General Statutes - Chapter 97
24
(2)
(3)
stayed during the pendency of an appeal except under those circumstances set
out in subdivision (4) of this subsection. A motion to stay the decision of the
Deputy Commissioner pursuant to G.S. 97-84 shall be directed to the Chair of
the Commission. The Full Commission shall render a decision on the appeal
of the Deputy Commissioner's decision on the motion within 60 days of the
filing of the notice of appeal.
In lieu of filing a motion with the Executive Secretary for an administrative
ruling pursuant to subdivision (1) of this subsection, when appealing a ruling
made pursuant to subdivision (1) of this subsection or when appealing an
administrative ruling of the Chief Deputy or the Chief Deputy's designee on
an emergency motion, a party may request a full evidentiary hearing pursuant
to G.S. 97-84 on an expedited basis, limited to a request for medical
compensation or a dispute involving medical issues, by filing a motion with
the Office of the Chief Deputy Commissioner. The case will not be ordered
into mediation based upon a party's request for hearing on the motion or
appeal under this subdivision, except upon the consent of the parties. The
Commission shall set the date of the expedited hearing, which shall be held
within 30 days of the filing of the motion or appeal and shall notify the parties
of the time and place of the hearing on the motion or appeal. Upon request,
the Commission may order expedited discovery. The record shall be closed
within 60 days of the filing of the motion, or in the case of an appeal pursuant
to subdivisions (1) and (3) of this subsection, within 60 days of the filing of
the appeal, unless the parties agree otherwise or the Commission so orders.
Transcripts of depositions shall be expedited if necessary and paid pursuant to
rules promulgated by the Commission related to depositions and shall be
submitted electronically to the Commission. The Commission shall decide the
issue in dispute and make findings of fact based upon the preponderance of
the evidence in view of the entire record. The award, together with a statement
of the findings of fact, rulings of law, and other matters pertinent to the
questions at issue shall be filed with the record of the proceedings within 15
days of the close of the hearing record, and a copy of the award shall
immediately be sent to the parties. Either party may appeal the decision of the
Deputy Commissioner pursuant to G.S. 97-84 to the Full Commission
pursuant to G.S. 97-85. The decision of the Deputy Commissioner pursuant to
G.S. 97-84 shall not be stayed during the pendency of an appeal except under
those circumstances set out in subdivision (4) of this subsection. A motion to
stay the decision of the Deputy Commissioner pursuant to G.S. 97-84 shall be
directed to the Chair of the Commission. The Full Commission shall render a
decision on the appeal of the Deputy Commissioner's decision on the motion
within 60 days of the filing of the notice of appeal.
An emergency medical motion filed by either party shall be filed with the
Office of the Chief Deputy Commissioner. The Chief Deputy or Chief
Deputy's designee shall rule on the motion within five days of receipt unless
the Chief Deputy or Chief Deputy's designee determines that the motion is not
an emergency, in which case the motion shall be referred to the Executive
Secretary for an administrative ruling pursuant to subdivision (1) of this
NC General Statutes - Chapter 97
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(4)
subsection. Motions requesting emergency medical relief shall contain all of
the following:
a.
An explanation of the medical diagnosis and treatment
recommendation of the health care provider that requires emergency
attention.
b.
A specific statement detailing the time-sensitive nature of the request
to include relevant dates and the potential for adverse consequences to
the movant if the recommended relief is not provided emergently.
c.
An explanation of opinions known and in the possession of the movant
of additional medical or other relevant experts, independent medical
examiners, and second opinion examiners.
d.
Documentation known and in the possession of the movant in support
of the request, including relevant medical records.
e.
A representation that informal means of resolving the issue have been
attempted.
Either party may appeal the decision of the Chief Deputy or the Chief
Deputy's designee on the emergency motion by requesting an expedited
formal hearing pursuant to G.S. 97-84 and subdivision (2) of this subsection to
appeal the administrative decision of the Chief Deputy or the Chief Deputy's
designee on the emergency motion. Within five days of the filing of a request
for an expedited formal hearing pursuant to G.S. 97-84 and subdivision (2) of
this subsection, the Commission shall assign a Deputy Commissioner to
conduct the formal hearing. The decision of the Chief Deputy or the Chief
Deputy's designee shall not be stayed during the pendency of an appeal of the
administrative decision except under those circumstances set out in
subdivision (4) of this subsection. Any motion to stay shall be filed with the
Deputy Commissioner scheduled to conduct the expedited formal hearing
pursuant to G.S. 97-84 and subdivision (2) of this subsection. Either party
may appeal the decision of the Deputy Commissioner pursuant to G.S. 97-84
to the Full Commission pursuant to G.S. 97-85. If so, the decision of the
Deputy Commissioner shall not be stayed during the pendency of an appeal
except under those circumstances set out in subdivision (4) of this subsection.
Any motion to stay the decision of the Deputy Commissioner pursuant to G.S.
97-84 shall be directed to the Chair of the Commission. The Full Commission
shall render a decision on the appeal of the Deputy Commissioner's decision
on the motion within 60 days of the filing of the notice of appeal.
The Commission shall consider, among other factors, all of the following
when determining whether to grant a motion to stay filed pursuant to this
subsection:
a.
Whether there would be immediate and irreparable injury, harm, loss,
or damage to either party.
b.
The nature and cost of the medical relief sought.
c.
The risk for further injury or disability to the employee inherent in the
treatment or its delay.
d.
Whether it has been recommended by an authorized physician.
NC General Statutes - Chapter 97
26
e.
Whether alternative therapeutic modalities are available and
reasonable.
(5)
If the Commission determines that any party has acted unreasonably by
initiating or objecting to a motion filed pursuant to this section, the
Commission may assess costs associated with any proceeding, including any
reasonable attorneys' fees and deposition costs, against the offending party.
(g),
(h) Repealed by Session Laws 2014-77, s. 4, effective July 22, 2014. (1929, c. 120, s.
25; 1931, c. 274, s. 4; 1933, c. 506; 1955, c. 1026, s. 2; 1973, c. 520, s. 1; 1991, c. 703, s. 3;
1997-308, s. 1; 1999-150, s. 1; 2005-448, s. 6.2; 2011-287, s. 6; 2013-294, s. 4; 2014-77, s. 4.)
§ 97-25.1. Limitation of duration of medical compensation.
The right to medical compensation shall terminate two years after the employer's last
payment of medical or indemnity compensation unless, prior to the expiration of this period,
either: (i) the employee files with the Commission an application for additional medical
compensation which is thereafter approved by the Commission, or (ii) the Commission on its
own motion orders additional medical compensation. If the Commission determines that there is
a substantial risk of the necessity of future medical compensation, the Commission shall provide
by order for payment of future necessary medical compensation. (1993 (Reg. Sess., 1994), c.
679, s. 2.5.)
§ 97-25.2. Managed care organizations.
The requirements of G.S. 97-25 may be satisfied by contracting with a managed care
organization. Notwithstanding any other provision of this Article, if an employer or carrier
contracts with a managed care organization for medical services pursuant to this Article, those
employees who are covered by the contract with the managed care organization shall receive
medical services for a condition for which the employer has accepted liability or authorized
treatment under this Article in the manner prescribed by the contract and in accordance with the
managed care organization's certificate of authority; provided that the contract complies with
rules adopted by the Commission, consistent with this Article, governing managed care
organizations. An employee must exhaust all dispute resolution procedures of a managed care
organization before applying to the Commission for review of any issue related to medical
services compensable under this Article. Once application to the Commission has been made, the
employee shall be entitled to an examination by a duly qualified physician or surgeon in the
same manner as provided by G.S. 97-27.
If an employee's medical services are provided through a managed care organization pursuant
to this section, subject to the rules of the managed care organization, the employee shall select
the attending physician from those physicians who are members of the managed care
organization's panel, and may subsequently change attending physicians once within the group of
physicians who are members of the managed care organization's panel without approval from the
employer or insurer. Additional changes in the attending physician or any change to a physician
or examination by a physician not a member of the insurer's managed care organization's panel
shall only be made pursuant to the organization's contract or upon reasonable grounds by order
of the Commission. (1993 (Reg. Sess., 1994), c. 679, s. 2.1.)
§ 97-25.3. Preauthorization.
NC General Statutes - Chapter 97
27
(a)
An insurer may require preauthorization for inpatient admission to a hospital,
inpatient admission to a treatment center, and inpatient or outpatient surgery. The insurer's
preauthorization requirement must adhere to the following standards:
(1)
The insurer may require no more than 10 days advance notice of the inpatient
admission or surgery.
(2)
The insurer must respond to a request for preauthorization within two business
days of the request.
(3)
The insurer shall review the need for the inpatient admission or surgery and
may require the employee to submit to an independent medical examination as
provided in G.S. 97-27(a). This examination must be completed and the
insurer must make its determination on the request for preauthorization within
seven days of the date of the request unless this time is extended by the
Commission for good cause.
(4)
The insurer shall document its review findings and determination in writing
and shall provide a copy of the findings and determination to the employee
and the employee's attending physician, and, if applicable, to the hospital or
treatment center.
(5)
The insurer shall authorize the inpatient admission or surgery when it requires
the employee to submit to a medical examination as provided in G.S. 97-27(a)
and the examining physician concurs with the original recommendation for
the inpatient admission or surgery. The insurer shall also authorize the
inpatient admission or surgery when the employee obtains a second opinion
from a physician approved by the insurer or the Commission, and the second
physician concurs with the original recommendation for the inpatient
admission or surgery. However, the insurer shall not be required by this
subdivision to authorize the inpatient admission or surgery if it denies liability
under this Article for the particular medical condition for which the services
are sought.
(6)
Except as provided in subsection (c) of this section, the insurer may reduce its
reimbursement of the provider's eligible charges under this Article by up to
fifty percent (50%) if the insurer has notified the provider in writing of its
preauthorization requirement and the provider failed to timely obtain
preauthorization. The employee shall not be liable for the balance of the
charges.
(7)
The insurer shall adhere to all other procedures for preauthorization prescribed
by the Commission.
(b)
An insurer may not impose a preauthorization requirement for the following:
(1)
Emergency services;
(2)
Services rendered in the diagnosis or treatment of an injury or illness for
which the insurer has not admitted liability or authorized payment for
treatment pursuant to this Article; and
(3)
Services rendered in the diagnosis and treatment of a specific medical
condition for which the insurer has not admitted liability or authorized
payment for treatment although the insurer admits the employee has suffered a
compensable injury or illness.
NC General Statutes - Chapter 97
28
(c)
The Commission may, upon reasonable grounds, upon the request of the employee or
provider, authorize treatment for which preauthorization is otherwise required by this section but
was not obtained if the Commission determines that the treatment is or was reasonably required
to effect a cure or give relief.
(d)
The Commission may adopt procedures governing the use of preauthorization
requirements and expeditious review of preauthorization denials.
(e)
A managed care organization may impose preauthorization requirements consistent
with the provisions of Chapter 58 of the General Statutes.
(f)
A provider that refuses to treat an employee for other than an emergency medical
condition because preauthorization has not been obtained shall be immune from liability in any
civil action for the refusal to treat the employee because of lack of preauthorization. (1993 (Reg.
Sess., 1994), c. 679, s. 2.2.)
§ 97-25.4. Utilization guidelines for medical treatment.
(a)
The Commission may adopt utilization rules and guidelines, consistent with this
Article, for medical care and medical rehabilitation services, other than those services provided
by managed care organizations pursuant to G.S. 97-25.2, including, but not limited to, necessary
palliative care, physical therapy treatment, psychological therapy, chiropractic services, medical
rehabilitation services, and attendant care. The Commission's rules and guidelines shall ensure
that injured employees are provided the services and care intended by this Article and that
medical costs are adequately contained. In developing the rules and guidelines, the Commission
may consider, among other factors, the practice guidelines adopted by the boards and
associations representing medical and rehabilitation professionals.
(b)
Palliative care rules or guidelines adopted by the Commission may require that the
provider (i) supply to the employer a treatment plan, including a schedule of measurable
objectives, a projected termination date for treatment, and an estimated cost of services, and (ii)
obtain preauthorization from the employer, not inconsistent with the provisions of G.S. 97-25.3.
(1993 (Reg. Sess., 1994), c. 679, s. 2.4.)
§ 97-25.5. Utilization guidelines for vocational and other rehabilitation.
The Commission may adopt utilization rules and guidelines, consistent with this Article, for
vocational rehabilitation services and other types of rehabilitation services. In developing the
rules and guidelines, the Commission may consider, among other factors, the practice and
treatment guidelines adopted by professional rehabilitation associations and organizations. (1993
(Reg. Sess., 1994), c. 679, s. 2.4.)
§ 97-25.6. Reasonable access to medical information.
(a)
Notwithstanding any provision of G.S. 8-53 to the contrary, and because discovery is
limited pursuant to G.S. 97-80, it is the policy of this State to protect the employee's right to a
confidential physician-patient relationship while allowing the parties to have reasonable access
to all relevant medical information, including medical records, reports, and information
necessary to the fair and swift administration and resolution of workers' compensation claims,
while limiting unnecessary communications with and administrative requests to health care
providers.
(b)
As used in this section, "relevant medical information" means any medical record,
report, or information that is any of the following:
NC General Statutes - Chapter 97
29
(1)
Restricted to the particular evaluation, diagnosis, or treatment of the injury or
disease for which compensation, including medical compensation, is sought.
(2)
Reasonably related to the injury or disease for which the employee claims
compensation.
(3)
Related to an assessment of the employee's ability to return to work as a result
of the particular injury or disease.
(c)
Relevant medical information shall be requested and provided subject to the
following provisions:
(1)
Medical records. – An employer is entitled, without the express authorization
of the employee, to obtain the employee's medical records containing relevant
medical information from the employee's health care providers. In a claim in
which the employer is not paying medical compensation to a health care
provider from whom the medical records are sought, or in a claim denied
pursuant to G.S. 97-18(c), the employer shall provide the employee with
contemporaneous written notice of the request for medical records. Upon the
request of the employee, the employer shall provide the employee with a copy
of any records received in response to this request within 30 days of its receipt
by the employer.
(2)
Written communications with health care providers. – An employer may
communicate with the employee's authorized health care provider in writing,
without the express authorization of the employee, to obtain relevant medical
information not available in the employee's medical records. The employer
shall provide the employee with contemporaneous written notice of the
written communication. The employer may request the following additional
information:
a.
The diagnosis of the employee's condition.
b.
The appropriate course of treatment.
c.
The anticipated time that the employee will be out of work.
d.
The relationship, if any, of the employee's condition to the
employment.
e.
Work restrictions resulting from the condition, including whether the
employee is able to return to the employee's employment with the
employer of injury as provided in an attached job description.
f.
The kind of work for which the employee may be eligible.
g.
The anticipated time the employee will be restricted.
h.
Any permanent impairment as a result of the condition.
The employer shall provide a copy of the health care provider's response to
the employee within 10 business days of its receipt by the employer.
(3)
Oral communications with health care providers. – An employer may
communicate with the employee's authorized health care provider by oral
communication to obtain relevant medical information not contained in the
employee's medical records, not available through written communication,
and not otherwise available to the employer, subject to the following:
a.
The employer must give the employee prior notice of the purpose of
the intended oral communication and an opportunity for the employee
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to participate in the oral communication at a mutually convenient time
for the employer, employee, and health care provider.
b.
The employer shall provide the employee with a summary of the
communication with the health care provider within 10 business days
of any oral communication in which the employee did not participate.
(d)
Additional Information Submitted by the Employer. – Notwithstanding subsection (c)
of this section, an employer may submit additional relevant medical information not already
contained in the employee's medical records to the employee's authorized health care provider
and may communicate in writing with the health care provider about the additional information
in accordance with the following procedure:
(1)
The employer shall first notify the employee in writing that the employer
intends to communicate additional information about the employee to the
employee's health care provider. The notice shall include the employer's
proposed written communication to the health care provider and the additional
information to be submitted.
(2)
The employee shall have 10 business days from the postmark or verifiable
facsimile or electronic mail either to consent or object to the employer's
proposed written communication.
(3)
Upon consent of the employee or in the absence of the employee's timely
objection, the employer may submit the additional information directly to the
health care provider.
(4)
Upon making a timely objection, the employee may request a protective order
to prevent the written communication, in which case the employer shall
refrain from communicating with the health care provider until the
Commission has ruled upon the employee's request. If the employee does not
file with the Industrial Commission a request for a protective order within the
time period set forth in subdivision (2) of subsection (d) of this section, the
employer may submit the additional information directly to the health care
provider. In deciding whether to allow the submission of additional
information to the health care provider, in part or in whole, the Commission
shall determine whether the proposed written communication and additional
information are pertinent to and necessary for the fair and swift administration
and resolution of the workers' compensation claim and whether there is an
alternative method to discover the information. If the Industrial Commission
determines that any party has acted unreasonably by initiating or objecting to
the submission of additional information to the health care provider, the
Commission may assess costs associated with any proceeding, including
reasonable attorneys' fees and deposition costs, against the offending party.
(e)
Any medical records or reports that reflect evaluation, diagnosis, or treatment of the
particular injury or disease for which compensation is sought or are reasonably related to the
injury or disease for which the employee seeks compensation that are in the possession of a party
shall be furnished to the requesting party by the opposing party when requested in writing,
except for records or reports generated by a retained expert.
(f)
Upon motion by an employee or the health care provider from whom medical records,
reports, or information are sought, or with whom oral communication is sought, or upon its own
motion, for good cause shown, the Commission may make any order which justice requires to
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protect an employee, health care provider, or other person from unreasonable annoyance,
embarrassment, oppression, or undue burden or expense.
(g)
Other forms of communication with a health care provider may be authorized by any
of the following:
(1)
A valid written authorization voluntarily given and signed by the employee.
(2)
An agreement of the parties.
(3)
An order of the Industrial Commission issued upon a showing that the
information sought is necessary for the administration of the employee's claim
and is not otherwise reasonably obtainable under this section or through other
discovery authorized by the rules of the Commission.
(h)
The employer may communicate with the health care provider to request medical bills
or a response to a pending written request, or about nonsubstantive administrative matters
without the express authorization of the employee.
(i)
The Commission shall establish an appropriate fee to compensate health care
providers for time spent communicating with the employer or employee. Each party shall bear its
own costs for said communication.
(j)
No cause of action shall arise and no health care provider shall incur any liability as a
result of the release of medical records, reports, or information pursuant to this Article.
(k)
For purposes of this section, the term "employer" means the employer, the employer's
attorney, and the employer's insurance carrier or third-party administrator; and the term
"employee" means the employee, legally appointed guardian, or any attorney representing the
employee. (2005-448, s. 6.1; 2011-287, s. 7; 2012-135, s. 2.)
§ 97-26. Fees allowed for medical treatment; malpractice of physician.
(a)
Fee Schedule. – The Commission shall adopt by rule a schedule of maximum fees for
medical compensation and shall periodically review the schedule and make revisions.
The fees adopted by the Commission in its schedule shall be adequate to ensure that (i)
injured workers are provided the standard of services and care intended by this Chapter, (ii)
providers are reimbursed reasonable fees for providing these services, and (iii) medical costs are
adequately contained.
The Commission may consider any and all reimbursement systems and plans in establishing
its fee schedule, including, but not limited to, the State Health Plan for Teachers and State
Employees (hereinafter, "State Plan"), Blue Cross and Blue Shield, and any other private or
governmental plans. The Commission may also consider any and all reimbursement
methodologies, including, but not limited to, the use of current procedural terminology ("CPT")
codes, diagnostic-related groupings ("DRGs"), per diem rates, capitated payments, and
resource-based relative-value system ("RBRVS") payments. The Commission may consider
statewide fee averages, geographical and community variations in provider costs, and any other
factors affecting provider costs.
(b)
Hospital Fees. – Each hospital subject to the provisions of this section shall be
reimbursed the amount provided for in this section unless it has agreed under contract with the
insurer, managed care organization, employer (or other payor obligated to reimburse for inpatient
hospital services rendered under this Chapter) to accept a different amount or reimbursement
methodology.
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The explanation of the fee schedule change that is published pursuant to G.S.
150B-21.2(c)(2) shall include a summary of the data and calculations on which the fee schedule
rate is based.
A hospital's itemized charges on the UB-92 claim form for workers' compensation services
shall be the same as itemized charges for like services for all other payers.
(c)
Maximum Reimbursement for Providers Under Subsection (a). – Each health care
provider subject to the provisions of subsection (a) of this section shall be reimbursed the amount
specified under the fee schedule unless the provider has agreed under contract with the insurer or
managed care organization to accept a different amount or reimbursement methodology. In any
instance in which neither the fee schedule nor a contractual fee applies, the maximum
reimbursement to which a provider under subsection (a) is entitled under this Article is the usual,
customary, and reasonable charge for the service or treatment rendered. In no event shall a
provider under subsection (a) charge more than its usual fee for the service or treatment
rendered.
(d)
Information to Commission. – Each health care provider seeking reimbursement for
medical compensation under this Article shall provide the Commission information requested by
the Commission for the development of fee schedules and the determination of appropriate
reimbursement.
(e)
When Charges Submitted. – Health care providers shall submit charges to the insurer
or managed care organization within 30 days of treatment, within 30 days after the end of the
month during which multiple treatments were provided, or within such other reasonable period
of time as allowed by the Commission. If an insurer or managed care organization disputes a
portion of a health care provider's bill, it shall pay the uncontested portion of the bill and shall
resolve disputes regarding the balance of the charges in accordance with this Article or its
contractual arrangement.
(f)
Repeating Diagnostic Tests. – A health care provider shall not authorize a diagnostic
test previously conducted by another provider, unless the health care provider has reasonable
grounds to believe a change in patient condition may have occurred or the quality of the prior
test is doubted. The Commission may adopt rules establishing reasonable requirements for
reports and records to be made available to other health care providers to prevent unnecessary
duplication of tests and examinations. A health care provider that violates this subsection shall
not be reimbursed for the costs associated with administering or analyzing the test.
(g)
Direct Reimbursement. – The Commission may adopt rules to allow insurers and
managed care organizations to review and reimburse charges for medical compensation without
submitting the charges to the Commission for review and approval.
(g1) Administrative Simplification. – The applicable administrative standards for code
sets, identifiers, formats, and electronic transactions to be used in processing electronic medical
bills under this Article shall comply with 45 C.F.R. § 162. The Commission shall adopt rules to
require electronic medical billing and payment processes, to standardize the necessary medical
documentation for billing adjudication, to provide for effective dates and compliance, and for
further implementation of this subsection.
(h)
Malpractice. – The employer shall not be liable in damages for malpractice by a
physician or surgeon furnished by him pursuant to the provisions of this section, but the
consequences of any such malpractice shall be deemed part of the injury resulting from the
accident, and shall be compensated for as such.
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(i)
Resolution of Dispute. – The employee or health care provider may apply to the
Commission by motion or for a hearing to resolve any dispute regarding the payment of charges
for medical compensation in accordance with this Article. (1929, c. 120, s. 26; 1955, c. 1026, s.
3; 1993 (Reg. Sess., 1994), c. 679, s. 2.3; 1995 (Reg. Sess., 1996), c. 548, s. 1; 1997-145, s. 1;
2001-410, s. 3; 2001-413, s. 8.2(a); 2005-448, s. 5; 2007-323, s. 28.22A(o); 2007-345, s. 12;
2011-287, s. 8; 2012-135, s. 3; 2013-410, s. 33(b).)
§ 97-26.1. Fees for medical records and reports; expert witnesses; communications with
health care providers.
The Commission may establish maximum fees for the following when related to a claim
under this Article: (i) the searching, handling, copying, and mailing of medical records, (ii) the
preparation of medical reports and narratives, (iii) the presentation of expert testimony in a
Commission proceeding, and (iv) the time spent communicating with the employer or employee
pursuant to G.S. 97-25.6(i). (1993 (Reg. Sess., 1994), c. 679, s. 5.6; 2012-135, s. 4.)
§ 97-26.2. Reimbursement for prescription drugs, prescribed over-the-counter drugs, and
professional pharmaceutical services.
(a)
The reimbursement amount for prescription drugs, prescribed over-the-counter drugs,
and professional pharmaceutical services shall be limited to the lesser of ninety-five percent
(95%) of the average wholesale price (AWP) of the product, calculated on a per unit basis, as of
the date of dispensing or the reimbursement amount provided for in an agreement between the
dispensing health care provider and the payor employer or workers' compensation insurance
carrier.
(b)
All of the following shall apply to the reimbursement for prescription drugs and
professional pharmaceutical services:
(1)
A health care provider seeking reimbursement for health care
provider-dispensed prescription drugs, prescribed over-the-counter drugs, and
pharmaceutical services shall include the original manufacturer's National
Drug Code (NDC) number, as assigned by the United States Food and Drug
Administration, on any billing documents or invoices issued.
(2)
In no event may a health care provider receive reimbursement in excess of
ninety-five percent (95%) of the AWP of the drugs dispensed by a health care
provider, as determined by reference to the original manufacturer's NDC
number.
(3)
A repackaged NDC number may not be individually used on any billing
documents or invoices issued and will not be considered the original
manufacturer's NDC number. A repackaged NDC number may only appear in
conjunction with the manufacturer's NDC number. If a health care provider
seeking reimbursement for drugs dispensed by a health care provider does not
include the original manufacturer's NDC number on any billing documents or
invoices issued, reimbursement shall be limited to one hundred percent
(100%) of the AWP of the least expensive clinically equivalent drug,
calculated on a per unit basis.
(4)
No outpatient health care provider, other than a licensed pharmacy, may
receive reimbursement for a Schedule II controlled substance, as defined in
G.S. 90-90, a Schedule III controlled substance, as defined in G.S. 90-91, a
NC General Statutes - Chapter 97
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(5)
Schedule IV controlled substance, as defined in G.S. 90-92, or a Schedule V
controlled substance, as defined in G.S. 90-93, dispensed in excess of an
initial five-day supply, commencing upon the employee's initial treatment
following injury. Reimbursement under this subdivision shall be made for the
five-day supply at the rates provided in this section.
For purposes of this section, the term "clinically equivalent" means a drug has
chemical equivalents which, when administered in the same amounts, will
provide essentially the same therapeutic effect as measured by the control of a
symptom or disease. (2014-100, s. 15.16A(a); 2015-241, s. 15.13B(a).)
§ 97-27.
Medical examination; facts not privileged; refusal to be examined suspends
compensation; other medical opinions; autopsy.
(a)
After an injury, and so long as the employee claims compensation, the employee, if
so requested by his or her employer or ordered by the Industrial Commission, shall submit to
independent medical examinations, at reasonable times and places, by a duly qualified physician
who is licensed and practicing in North Carolina and is designated and paid by the employer or
the Industrial Commission, even if the employee's claim has been denied pursuant to G.S.
97-18(c). The independent medical examination shall be subject to the following provisions:
(1)
The injured employee has the right to have present at the independent medical
examination any physician provided and paid by the employee.
(2)
Notwithstanding the provisions of G.S. 8-53, no fact communicated to or
otherwise learned by any physician who may have attended or examined the
employee, or who may have been present at any examination, shall be
privileged with respect to a claim before the Industrial Commission.
(3)
Notwithstanding the provisions of G.S. 97-25.6 to the contrary, an employer
or its agent shall be allowed to openly communicate either orally or in writing
with an independent medical examiner chosen by the employer regardless of
whether the examiner physically examined the employee.
(4)
If the examiner physically examined the employee, the employer must
produce the examiner's report to the employee within 10 business days of
receipt by the employer, along with a copy of all documents and written
communication sent to the independent medical examiner pertaining to the
employee.
(5)
If the employee refuses to submit to or in any way obstructs an independent
medical examination requested and provided by the employer, the employee's
right to compensation and to take or prosecute any proceedings under this
Article shall be suspended pursuant to G.S. 97-18.1 until the refusal or
objection ceases, and no compensation shall at any time be payable for the
period of obstruction, unless in the opinion of the Industrial Commission the
circumstances justify the refusal or obstruction. When the employer seeks to
suspend compensation under this subdivision, it shall not be necessary for the
employer to have first obtained an order compelling the employee to submit to
the proposed independent medical examination. Any order issued by the
Commission suspending compensation pursuant to G.S. 97-18.1 shall specify
what action the employee should take to end the suspension and reinstate the
compensation.
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(b)
In any case arising under this Article in which the employee is dissatisfied with the
percentage of permanent disability as provided by G.S. 97-31 and determined by the authorized
health care provider, the employee is entitled to have another examination solely on the
percentage of permanent disability provided by a duly qualified physician of the employee's
choosing who is licensed to practice in North Carolina, or licensed in another state if agreed to
by the parties or ordered by the Commission, and designated by the employee. That physician
shall be paid by the employer in the same manner as health care providers designated by the
employer or the Industrial Commission are paid. The Industrial Commission must either
disregard or give less weight to the opinions of the duly qualified physician chosen by the
employee pursuant to this subsection on issues outside the scope of the G.S. 97-27(b)
examination. No fact that is communicated to or otherwise learned by any physician who
attended or examined the employee, or who was present at any examination, shall be privileged
with respect to a claim before the Industrial Commission. Provided, however, that all travel
expenses incurred in obtaining the examination shall be paid by the employee.
(c)
The employer, or the Industrial Commission, has the right in any case of death to
require an autopsy at its expense. (1929, c. 120, s. 27; 1959, c. 732; 1969, c. 135; 1973, c. 520, s.
2; 1977, c. 511; 1991, c. 636, s. 3; 2011-287, s. 9; 2012-135, s. 5.)
§ 97-28. Seven-day waiting period; exceptions.
No compensation, as defined in G.S. 97-2(11), shall be allowed for the first seven calendar
days of disability resulting from an injury, except the benefits provided for in G.S. 97-25.
Provided however, that in the case the injury results in disability of more than 21 days, the
compensation shall be allowed from the date of the disability. Nothing in this section shall
prevent an employer from allowing an employee to use paid sick leave, vacation or annual leave,
or disability benefits provided directly by the employer during the first seven calendar days of
disability. (1929, c. 120, s. 28; 1983, c. 599; 1987, c. 729, s. 5.)
§ 97-29. Rates and duration of compensation for total incapacity.
(a)
When an employee qualifies for total disability, the employer shall pay or cause to be
paid, as hereinafter provided by subsections (b) through (d) of this section, to the injured
employee a weekly compensation equal to sixty-six and two-thirds percent (662/3%) of his
average weekly wages, but not more than the amount established annually to be effective
January 1 as provided herein, nor less than thirty dollars ($30.00) per week.
(b)
When a claim is compensable pursuant to G.S. 97-18(b), paid without prejudice
pursuant to G.S. 97-18(d), agreed by the parties pursuant to G.S. 97-82, or when a claim has
been deemed compensable following a hearing pursuant to G.S. 97-84, the employee qualifies
for temporary total disability subject to the limitations noted herein. The employee shall not be
entitled to compensation pursuant to this subsection greater than 500 weeks from the date of first
disability unless the employee qualifies for extended compensation under subsection (c) of this
section.
(c)
An employee may qualify for extended compensation in excess of the 500-week
limitation on temporary total disability as described in subsection (b) of this section only if (i) at
the time the employee makes application to the Commission to exceed the 500-week limitation
on temporary total disability as described in subsection (b) of this section, 425 weeks have
passed since the date of first disability and (ii) pursuant to the provisions of G.S. 97-84, unless
agreed to by the parties, the employee shall prove by a preponderance of the evidence that the
NC General Statutes - Chapter 97
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employee has sustained a total loss of wage-earning capacity. If an employee makes application
for extended compensation pursuant to this subsection and is awarded extended compensation by
the Commission, the award shall not be stayed pursuant to G.S. 97-85 or G.S. 97-86 until the full
Commission or an appellate court determines otherwise. Upon its own motion or upon the
application of any party in interest, the Industrial Commission may review an award for extended
compensation in excess of the 500-week limitation on temporary total disability described in
subsection (b) of this section, and, on such review, may make an award ending or continuing
extended compensation. When reviewing a prior award to determine if the employee remains
entitled to extended compensation, the Commission shall determine if the employer has proven
by a preponderance of the evidence that the employee no longer has a total loss of wage-earning
capacity. When an employee is receiving full retirement benefits under section 202(a) of the
Social Security Act, after attainment of retirement age, as defined in section 216(l) of the Social
Security Act, the employer may reduce the extended compensation by one hundred percent
(100%) of the employee's retirement benefit. The reduction shall consist of the employee's
primary benefit paid pursuant to section 202(a) of the Social Security Act but shall not include
any dependent or auxiliary benefits paid pursuant to any other section of the Social Security Act,
if any, or any cost-of-living increases in benefits made pursuant to section 215(i) of the Social
Security Act.
(d)
An injured employee may qualify for permanent total disability only if the employee
has one or more of the following physical or mental limitations resulting from the injury:
(1)
The loss of both hands, both arms, both feet, both legs, both eyes, or any two
thereof, as provided by G.S. 97-31(17).
(2)
Spinal injury involving severe paralysis of both arms, both legs, or the trunk.
(3)
Severe brain or closed head injury as evidenced by severe and permanent:
a.
Sensory or motor disturbances;
b.
Communication disturbances;
c.
Complex integrated disturbances of cerebral function; or
d.
Neurological disorders.
(4)
Second-degree or third-degree burns to thirty-three percent (33%) or more of
the total body surface.
An employee who qualifies for permanent total disability pursuant to this subsection shall be
entitled to compensation, including medical compensation, during the lifetime of the injured
employee, unless the employer shows by a preponderance of the evidence that the employee is
capable of returning to suitable employment as defined in G.S. 97-2(22). Provided, however, the
termination or suspension of compensation because the employee is capable of returning to
suitable employment as defined in G.S. 97-2(22) does not affect the employee's entitlement to
medical compensation. An employee who qualifies for permanent total disability under
subdivision (1) of this subsection is entitled to lifetime compensation, including medical
compensation, regardless of whether or not the employee has returned to work in any capacity.
In no other case shall an employee be eligible for lifetime compensation for permanent total
disability.
(e)
An employee shall not be entitled to benefits under this section or G.S. 97-30 and
G.S. 97-31 at the same time.
(f)
Where an employee can show entitlement to compensation pursuant to this section or
G.S. 97-30 and a specific physical impairment pursuant to G.S. 97-31, the employee shall not
NC General Statutes - Chapter 97
37
collect benefits concurrently pursuant to both this section or G.S. 97-30 and G.S. 97-31, but
rather is entitled to select the statutory compensation which provides the more favorable remedy.
(g)
The weekly compensation payment for members of the North Carolina National
Guard and the North Carolina State Defense Militia shall be the maximum amount established
annually in accordance with subsection (i) of this section per week as fixed herein. The weekly
compensation payment for deputy sheriffs, or those acting in the capacity of deputy sheriffs, who
serve upon a fee basis, shall be thirty dollars ($30.00) a week as fixed herein.
(h)
An officer or member of the State Highway Patrol shall not be awarded any weekly
compensation under the provisions of this section for the first two years of any incapacity
resulting from an injury by accident arising out of and in the course of the performance by him of
his official duties if, during such incapacity, he continues to be an officer or member of the State
Highway Patrol, but he shall be awarded any other benefits to which he may be entitled under the
provisions of this Article.
(i)
Notwithstanding any other provision of this Article, on July 1 of each year, a
maximum weekly benefit amount shall be computed. The amount of this maximum weekly
benefit shall be derived by obtaining the average weekly insured wage, as defined in G.S. 96-1,
by multiplying such average weekly insured wage by 1.10, and by rounding such figure to its
nearest multiple of two dollars ($2.00), and this said maximum weekly benefit shall be
applicable to all injuries and claims arising on and after January 1 following such computation.
Such maximum weekly benefit shall apply to all provisions of this Chapter and shall be adjusted
July 1 and effective January 1 of each year as herein provided.
(j)
If death results from the injury or occupational disease, then the employer shall pay
compensation in accordance with the provisions of G.S. 97-38. (1929, c. 120, s. 29; 1939, c.
277, s. 1; 1943, c. 502, s. 3; c. 543; c. 672, s. 2; 1945, c. 766; 1947, c. 823; 1949, c. 1017; 1951,
c. 70, s. 1; 1953, c. 1135, s. 1; c. 1195, s. 2; 1955, c. 1026, s. 5; 1957, c. 1217; 1963, c. 604, s. 1;
1967, c. 84, s. 1; 1969, c. 143, s. 1; 1971, c. 281, s. 1; c. 321, s. 1; 1973, c. 515, s. 1; c. 759, s. 1;
c. 1103, s. 1; c. 1308, ss. 1, 2; 1975, c. 284, s. 4; 1979, c. 244; 1981, c. 276, s. 2; c. 378, s. 1; c.
421, s. 3; c. 521, s. 2; c. 920, s. 1; 1987, c. 729, s. 6; 1991, c. 703, s. 4; 1999-456, s. 33(d);
2009-281, s. 1; 2011-287, s. 10; 2012-135, s. 6; 2013-2, s. 9(e); 2013-224, s. 19; 2013-410, s.
19.)
§ 97-29.1. Increase in payments in cases for total and permanent disability occurring prior
to July 1, 1973.
In all cases of total and permanent disability occurring prior to July 1, 1973, weekly
compensation payments shall be increased effective July 1, 1977, to an amount computed by
multiplying the number of calendar years prior to July 1, 1973, that the case arose by five percent
(5%). Payments made by the employer or its insurance carrier by reason of such increase in
weekly benefits may be deducted by such employer or insurance carrier from the tax levied on
such employer or carrier pursuant to G.S. 105-228.5 or G.S. 97-100. Every employer or
insurance carrier claiming such deduction or credit shall verify such claim to the Secretary of
Revenue or the Industrial Commission by affidavit or by such other method as may be prescribed
by the Secretary of Revenue or the Industrial Commission. (1977, c. 651.)
§ 97-30. Partial incapacity.
Except as otherwise provided in G.S. 97-31, where the incapacity for work resulting from the
injury is partial, the employer shall pay, or cause to be paid, as hereinafter provided, to the
NC General Statutes - Chapter 97
38
injured employee during such disability, a weekly compensation equal to sixty-six and two-thirds
percent (66 2/3%) of the difference between his average weekly wages before the injury and the
average weekly wages which he is able to earn thereafter, but not more than the amount
established annually to be effective January 1 as provided in G.S. 97-29 a week, and in no case
shall the employee receive more than 500 weeks of payments under this section. Any weeks of
payments made pursuant to G.S. 97-29 shall be deducted from the 500 weeks of payments
available under this section. An officer or member of the State Highway Patrol shall not be
awarded any weekly compensation under the provisions of this section for the first two years of
any incapacity resulting from an injury by accident arising out of and in the course of the
performance by him of his official duties if, during such incapacity, he continues to be an officer
or member of the State Highway Patrol, but he shall be awarded any other benefits to which he
may be entitled under the provisions of this Article. (1929, c. 120, s. 30; 1943, c. 502, s. 4; 1947,
c. 823; 1951, c. 70, s. 2; 1953, c. 1195, s. 3; 1955, c. 1026, s. 6; 1957, c. 1217; 1963, c. 604, s. 2;
1967, c. 84, s. 2; 1969, c. 143, s. 2; 1971, c. 281, s. 2; 1973, c. 515, s. 2; c. 759, s. 2; 1981, c. 276,
s. 1; 2011-287, s. 11.)
§ 97-31. Schedule of injuries; rate and period of compensation.
In cases included by the following schedule the compensation in each case shall be paid for
disability during the healing period and in addition the disability shall be deemed to continue for
the period specified, and shall be in lieu of all other compensation, including disfigurement, to
wit:
(1)
For the loss of a thumb, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 75 weeks.
(2)
For the loss of a first finger, commonly called the index finger, sixty-six and
two-thirds percent (66 2/3%) of the average weekly wages during 45 weeks.
(3)
For the loss of a second finger, sixty-six and two-thirds percent (66 2/3%) of
the average weekly wages during 40 weeks.
(4)
For the loss of a third finger, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 25 weeks.
(5)
For the loss of a fourth finger, commonly called the little finger, sixty-six and
two-thirds percent (66 2/3%) of the average weekly wages during 20 weeks.
(6)
The loss of the first phalange of the thumb or any finger shall be considered to
be equal to the loss of one half of such thumb or finger, and the compensation
shall be for one half of the periods of time above specified.
(7)
The loss of more than one phalange shall be considered the loss of the entire
finger or thumb: Provided, however, that in no case shall the amount received
for more than one finger exceed the amount provided in this schedule for the
loss of a hand.
(8)
For the loss of a great toe, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 35 weeks.
(9)
For the loss of one of the toes other than a great toe, sixty-six and two-thirds
percent (66 2/3%) of the average weekly wages during 10 weeks.
(10) The loss of the first phalange of any toe shall be considered to be equal to the
loss of one half of such toe, and the compensation shall be for one half of the
periods of time above specified.
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39
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
The loss of more than one phalange shall be considered as the loss of the
entire toe.
For the loss of a hand, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 200 weeks.
For the loss of an arm, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 240 weeks.
For the loss of a foot, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 144 weeks.
For the loss of a leg, sixty-six and two-thirds percent (66 2/3%) of the average
weekly wages during 200 weeks.
For the loss of an eye, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 120 weeks.
The loss of both hands, or both arms, or both feet, or both legs, or both eyes,
or any two thereof, shall constitute total and permanent disability, to be
compensated according to the provisions of G.S. 97-29. The employee shall
have a vested right in a minimum amount of compensation for the total
number of weeks of benefits provided under this section for each member
involved. When an employee dies from any cause other than the injury for
which he is entitled to compensation, payment of the minimum amount of
compensation shall be payable as provided in G.S. 97-37.
For the complete loss of hearing in one ear, sixty-six and two-thirds percent
(66 2/3%) of the average weekly wages during 70 weeks; for the complete
loss of hearing in both ears, sixty-six and two-thirds percent (66 2/3%) of the
average weekly wages during 150 weeks.
Total loss of use of a member or loss of vision of an eye shall be considered as
equivalent to the loss of such member or eye. The compensation for partial
loss of or for partial loss of use of a member or for partial loss of vision of an
eye or for partial loss of hearing shall be such proportion of the periods of
payment above provided for total loss as such partial loss bears to total loss,
except that in cases where there is eighty-five per centum (85%), or more, loss
of vision in any eye, this shall be deemed "industrial blindness" and
compensated as for total loss of vision of such eye.
The weekly compensation payments referred to in this section shall all be
subject to the same limitations as to maximum and minimum as set out in G.S.
97-29.
In case of serious facial or head disfigurement, the Industrial Commission
shall award proper and equitable compensation not to exceed twenty thousand
dollars ($20,000). In case of enucleation where an artificial eye cannot be
fitted and used, the Industrial Commission may award compensation as for
serious facial disfigurement.
In case of serious bodily disfigurement for which no compensation is payable
under any other subdivision of this section, but excluding the disfigurement
resulting from permanent loss or permanent partial loss of use of any member
of the body for which compensation is fixed in the schedule contained in this
section, the Industrial Commission may award proper and equitable
compensation not to exceed ten thousand dollars ($10,000).
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(23)
(24)
For the total loss of use of the back, sixty-six and two-thirds percent (66
2/3%) of the average weekly wages during 300 weeks. The compensation for
partial loss of use of the back shall be such proportion of the periods of
payment herein provided for total loss as such partial loss bears to total loss,
except that in cases where there is seventy-five per centum (75%) or more loss
of use of the back, in which event the injured employee shall be deemed to
have suffered "total industrial disability" and compensated as for total loss of
use of the back.
In case of the loss of or permanent injury to any important external or internal
organ or part of the body for which no compensation is payable under any
other subdivision of this section, the Industrial Commission may award proper
and equitable compensation not to exceed twenty thousand dollars ($20,000).
(1929, c. 120, s. 31; 1931, c. 164; 1943, c. 502, s. 2; 1955, c. 1026, s. 7; 1957,
c. 1221; c. 1396, ss. 2, 3; 1963, c. 424, ss. 1, 2; 1967, c. 84, s. 3; 1969, c. 143,
s. 3; 1973, c. 515, s. 3; c. 759, s. 3; c. 761, ss. 1, 2; 1975, c. 164, s. 1; 1977, c.
892, s. 1; 1979, c. 250; 1987, c. 729, ss. 7, 8.)
§ 97-31.1. Effective date of legislative changes in benefits.
Every act of the General Assembly that changes the benefits enumerated in this Chapter shall
become law no later than June 1 and shall have an effective date of no earlier than January 1 of
the year after which it is ratified. (1981, c. 521, s. 3; 1995, c. 20, s. 11.)
§ 97-32.
Refusal of injured employee to accept suitable employment as suspending
compensation.
If an injured employee refuses suitable employment as defined by G.S. 97-2(22), the
employee shall not be entitled to any compensation at any time during the continuance of such
refusal, unless in the opinion of the Industrial Commission such refusal was justified. Any order
issued by the Commission suspending compensation pursuant to G.S. 97-18.1 on the ground of
an unjustified refusal of an offer of suitable employment shall specify what actions the employee
should take to end the suspension and reinstate the compensation. Nothing in this Article
prohibits an employer from contacting the employee directly about returning to suitable
employment with contemporaneous notice to the employee's counsel, if any. (1929, c. 120, s.
32; 2011-287, s. 12.)
§ 97-32.1. Trial return to work.
Notwithstanding the provisions of G.S. 97-32, an employee may attempt a trial return to
work for a period not to exceed nine months. During a trial return to work period, the employee
shall be paid any compensation which may be owed for partial disability pursuant to G.S. 97-30.
If the trial return to work is unsuccessful, the employee's right to continuing compensation under
G.S. 97-29 shall be unimpaired unless terminated or suspended thereafter pursuant to the
provisions of this Article. (1993 (Reg. Sess., 1994), c. 679, s. 4.1.)
§ 97-32.2. Vocational rehabilitation.
(a)
In a compensable claim, the employer may engage vocational rehabilitation services
at any point during a claim, regardless of whether the employee has reached maximum medical
improvement to include, among other services, a one-time assessment of the employee's
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41
vocational potential, except vocational rehabilitation services may not be required if the
employee is receiving benefits pursuant to G.S. 97-29(c) or G.S. 97-29(d). If the employee (i)
has not returned to work or (ii) has returned to work earning less than seventy-five percent (75%)
of the employee's average weekly wages and is receiving benefits pursuant to G.S. 97-30, the
employee may request vocational rehabilitation services, including education and retraining in
the North Carolina community college or university systems so long as the education and
retraining are reasonably likely to substantially increase the employee's wage-earning capacity
following completion of the education or retraining program. Provided, however, the
seventy-five percent (75%) threshold is for the purposes of qualification for vocational
rehabilitation benefits only and shall not impact a decision as to whether a job is suitable per
G.S. 97-2(22). The expense of vocational rehabilitation services provided pursuant to this section
shall be borne by the employer in the same manner as medical compensation.
(b)
Vocational rehabilitation services shall be provided by either a qualified or
conditional rehabilitation professional approved by the Industrial Commission. Unless the parties
mutually agree to a vocational rehabilitation professional, the employer may make the initial
selection. At any point during the vocational rehabilitation process, either party may request that
the Industrial Commission order a change of vocational rehabilitation professional for good
cause.
(c)
Vocational rehabilitation services shall include a vocational assessment and the
formulation of an individualized written rehabilitation plan with the goal of substantially
increasing the employee's wage-earning capacity, and subject to the following provisions:
(1)
When performing a vocational assessment, the vocational rehabilitation
professional should evaluate the employee's medical and vocational
circumstances, the employee's expectations and specific requests for
vocational training, benefits expected from vocational services, and other
information significant to the employee's employment potential. The
assessment should also involve a face-to-face interview between the employee
and the vocational rehabilitation professional to identify the specific type and
sequence of appropriate services. If, at any point during vocational
rehabilitation services, the vocational rehabilitation professional determines
that the employee will not benefit from vocational rehabilitation services, the
employer may terminate said services unless the Commission orders
otherwise.
(2)
Following assessment, and after receiving input from the employee, the
vocational rehabilitation professional shall draft an individualized written
rehabilitation plan. The plan should be individually tailored to the employee
based on the employee's education, skills, experience, and aptitudes, with
appropriate recommendations for vocational services, which may include
appropriate retraining, education, or job placement. The plan may be changed
or updated by mutual consent at any time during rehabilitation services. A
written plan is not necessary if the vocational rehabilitation professional has
been retained to perform a one-time assessment.
(d)
Specific vocational rehabilitation services may include, but are not limited to,
vocational assessment, vocational exploration, sheltered workshop or community supported
employment training, counseling, job analysis, job modification, job development and
placement, labor market survey, vocational or psychometric testing, analysis of transferable
NC General Statutes - Chapter 97
42
skills, work adjustment counseling, job seeking skills training, on-the-job training, or training or
education through the North Carolina community college or university systems.
(e)
Vocational rehabilitation services may be terminated by agreement of the parties or
by order of the Commission.
(f)
Job placement activities may commence after completion of an individualized written
rehabilitation plan. Return-to-work options should be considered, with order of priority given to
returning the employee to suitable employment with the current employer, returning the
employee to suitable employment with a new employer, and, if appropriate, formal education or
vocational training to prepare the employee for suitable employment with the current employer
or a new employer.
(g)
The refusal of the employee to accept or cooperate with vocational rehabilitation
services when ordered by the Industrial Commission shall bar the employee from further
compensation until such refusal ceases, and no compensation shall at any time be paid for the
period of suspension, unless in the opinion of the Industrial Commission the circumstances
justified the refusal. Any order issued by the Commission suspending compensation per G.S.
97-18.1 shall specify what action the employee should take to end the suspension and reinstate
the compensation. (2011-287, s. 13; 2012-135, s. 7.)
§ 97-33. Prorating in event of earlier disability or injury.
If any employee is an epileptic, or has a permanent disability or has sustained a permanent
injury in service in the United States Army or Navy, or in another employment other than that in
which he received a subsequent permanent injury by accident, such as specified in G.S. 97-31, he
shall be entitled to compensation only for the degree of disability which would have resulted
from the later accident if the earlier disability or injury had not existed. (1929, c. 120, s. 33;
1975, c. 832; 2011-183, s. 127(b).)
§ 97-34. Employee receiving an injury when being compensated for former injury.
If an employee receives an injury for which compensation is payable, while he is still
receiving or entitled to compensation for a previous injury in the same employment, he shall not
at the same time be entitled to compensation for both injuries, unless the later injury be a
permanent injury such as specified in G.S. 97-31; but he shall be entitled to compensation for
that injury and from the time of that injury which will cover the longest period and the largest
amount payable under this Article. (1929, c. 120, s. 34.)
§ 97-35. How compensation paid for two injuries; employer liable only for subsequent
injury.
If any employee receives a permanent injury as specified in G.S. 97-31 after having sustained
another permanent injury in the same employment, he shall be entitled to compensation for both
injuries, but the total compensation shall be paid by extending the period and not by increasing
the amount of weekly compensation, and in no case exceeding 500 weeks.
If an employee has previously incurred permanent partial disability through the loss of a
hand, arm, foot, leg, or eye, and by subsequent accident incurs total permanent disability through
the loss of another member, the employer's liability is for the subsequent injury only. (1929, c.
120, s. 35.)
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43
§ 97-36. Accidents taking place outside State; employees receiving compensation from
another state.
Where an accident happens while the employee is employed elsewhere than in this State and
the accident is one which would entitle him or his dependents or next of kin to compensation if it
had happened in this State, then the employee or his dependents or next of kin shall be entitled to
compensation (i) if the contract of employment was made in this State, (ii) if the employer's
principal place of business is in this State, or (iii) if the employee's principal place of
employment is within this State; provided, however, that if an employee or his dependents or
next of kin shall receive compensation or damages under the laws of any other state nothing
herein contained shall be construed so as to permit a total compensation for the same injury
greater than is provided for in this Article. (1929, c. 120, s. 36; 1963, c. 450, s. 2; 1967, c. 1229,
s. 3; 1973, c. 1059; 1991, c. 284.)
§ 97-37. Where injured employee dies before total compensation is paid.
When an employee receives or is entitled to compensation under this Article for an injury
covered by G.S. 97-31 and dies from any other cause than the injury for which he was entitled to
compensation, payment of the unpaid balance of compensation shall be made: First, to the
surviving whole dependents; second, to partial dependents, and, if no dependents, to the next of
kin as defined in the Article; if there are no whole or partial dependents or next of kin as defined
in the Article, then to the personal representative, in lieu of the compensation the employee
would have been entitled to had he lived.
Provided, however, that if the death is due to a cause that is compensable under this Article,
and the dependents of such employee are awarded compensation therefor, all right to unpaid
compensation provided by this section shall cease and determine. (1929, c. 120, s. 37; 1947, c.
823; 1971, c. 322.)
§ 97-38.
Where death results proximately from compensable injury or occupational
disease; dependents; burial expenses; compensation to aliens; election by partial
dependents.
If death results proximately from a compensable injury or occupational disease and within
six years thereafter, or within two years of the final determination of disability, whichever is
later, the employer shall pay or cause to be paid, subject to the provisions of other sections of this
Article, weekly payments of compensation equal to sixty-six and two-thirds percent (66 2/3%) of
the average weekly wages of the deceased employee at the time of the accident, but not more
than the amount established annually to be effective October 1 as provided in G.S. 97-29, nor
less than thirty dollars ($30.00), per week, and burial expenses not exceeding ten thousand
dollars ($10,000), to the person or persons entitled thereto as follows:
(1)
Persons wholly dependent for support upon the earnings of the deceased
employee at the time of the accident shall be entitled to receive the entire
compensation payable share and share alike to the exclusion of all other
persons. If there be only one person wholly dependent, then that person shall
receive the entire compensation payable.
(2)
If there is no person wholly dependent, then any person partially dependent
for support upon the earnings of the deceased employee at the time of the
accident shall be entitled to receive a weekly payment of compensation
computed as hereinabove provided, but such weekly payment shall be the
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(3)
same proportion of the weekly compensation provided for a whole dependent
as the amount annually contributed by the deceased employee to the support
of such partial dependent bears to the annual earnings of the deceased at the
time of the accident.
If there is no person wholly dependent, and the person or all persons partially
dependent is or are within the classes of persons defined as "next of kin" in
G.S. 97-40, whether or not such persons or such classes of persons are of kin
to the deceased employee in equal degree, and all so elect, he or they may
take, share and share alike, the commuted value of the amount provided for
whole dependents in (1) above instead of the proportional payment provided
for partial dependents in (2) above; provided, that the election herein provided
may be exercised on behalf of any infant partial dependent by a duly qualified
guardian; provided, further, that the Industrial Commission may, in its
discretion, permit a parent or person standing in loco parentis to such infant to
exercise such option in its behalf, the award to be payable only to a duly
qualified guardian except as in this Article otherwise provided; and provided,
further, that if such election is exercised by or on behalf of more than one
person, then they shall take the commuted amount in equal shares.
When weekly payments have been made to an injured employee before his
death, the compensation to dependents shall begin from the date of the last of
such payments. Compensation payments due on account of death shall be paid
for a period of 500 weeks from the date of the death of the employee;
provided, however, after said 500-week period in case of a widow or widower
who is unable to support herself or himself because of physical or mental
disability as of the date of death of the employee, compensation payments
shall continue during her or his lifetime or until remarriage and compensation
payments due a dependent child shall be continued until such child reaches the
age of 18.
Compensation payable under this Article to aliens not residents (or about
to become nonresidents) of the United States or Canada, shall be the same in
amounts as provided for residents, except that dependents in any foreign
country except Canada shall be limited to surviving spouse and child or
children, or if there be no surviving spouse or child or children, to the
surviving father or mother. (1929, c. 120, s. 38; 1943, c. 163; c. 502, s. 5;
1947, c. 823; 1951, c. 70, s. 3; 1953, c. 53, s. 1; 1955, c. 1026, s. 8; 1957, c.
1217; 1963, c. 604, s. 3; 1967, c. 84, s. 4; 1969, c. 143, s. 4; 1971, c. 281, s. 3;
1973, c. 515, s. 4; c. 759, s. 4; c. 1308, ss. 3, 4; c. 1357, ss. 1, 2; 1977, c. 409;
1981, c. 276, s. 1; c. 378, s. 1; c. 379; 1983, c. 772, s. 1; 1987, c. 729, s. 9;
1997-301, s. 1; 2001-232, s. 1; 2011-287, s. 14.)
§ 97-39. Widow, widower, or child to be conclusively presumed to be dependent; other
cases determined upon facts; division of death benefits among those wholly
dependent; when division among partially dependent.
A widow, a widower and/or a child shall be conclusively presumed to be wholly dependent
for support upon the deceased employee. In all other cases questions of dependency, in whole or
in part shall be determined in accordance with the facts as the facts may be at the time of the
NC General Statutes - Chapter 97
45
accident, but no allowance shall be made for any payment made in lieu of board and lodging or
services, and no compensation shall be allowed unless the dependency existed for a period of
three months or more prior to the accident. If there is more than one person wholly dependent,
the death benefit shall be divided among them, the persons partly dependent, if any, shall receive
no part thereof. If there is no one wholly dependent, and more than one person partially
dependent, the death benefit shall be divided among them according to the relative extent of their
dependency.
The widow, or widower and all children of deceased employees shall be conclusively
presumed to be dependents of deceased and shall be entitled to receive the benefits of this Article
for the full periods specified herein. (1929, c. 120, s. 39.)
§ 97-40. Commutation and payment of compensation in absence of dependents; "next of
kin" defined; commutation and distribution of compensation to partially
dependent next of kin; payment in absence of both dependents and next of kin.
Subject to the provisions of G.S. 97-38, if the deceased employee leaves neither whole nor
partial dependents, then the compensation which would be payable under G.S. 97-38 to whole
dependents shall be commuted to its present value and paid in a lump sum to the next of kin as
herein defined. For purposes of this section and G.S. 97-38, "next of kin" shall include only
child, father, mother, brother or sister of the deceased employee, including adult children or adult
brothers or adult sisters of the deceased, but excluding a parent who has willfully abandoned the
care and maintenance of his or her child and who has not resumed its care and maintenance at
least one year prior to the first occurring of the majority or death of the child and continued its
care and maintenance until its death or majority. For all such next of kin who are neither wholly
nor partially dependent upon the deceased employee and who take under this section, the order
of priority among them shall be governed by the general law applicable to the distribution of the
personal estate of persons dying intestate. In the event of exclusion of a parent based on
abandonment, the claim for compensation benefits shall be treated as though the abandoning
parent had predeceased the employee. For all such next of kin who were also partially dependent
on the deceased employee but who exercise the election provided for partial dependents by G.S.
97-38, the general law applicable to the distribution of the personal estate of persons dying
intestate shall not apply and such person or persons upon the exercise of such election, shall be
entitled, share and share alike, to the compensation provided in G.S. 97-38 for whole dependents
commuted to its present value and paid in a lump sum.
If the deceased employee leaves neither whole dependents, partial dependents, nor next of
kin as hereinabove defined, then no compensation shall be due or payable on account of the
death of the deceased employee, except that the employer shall pay or cause to be paid the burial
expenses of the deceased employee not exceeding ten thousand dollars ($10,000) to the person or
persons entitled thereto. (1929, c. 120, s. 40; 1931, c. 274, s. 5; c. 319; 1945, c. 766; 1953, c. 53,
s. 2; c. 1135, s. 2; 1963, c. 604, s. 4; 1965, c. 419; 1967, c. 84, s. 5; 1971, c. 1179; 1981, c. 379;
1987, c. 729, s. 10; 2001-232, s. 3.1; 2011-287, s. 15.)
§ 97-40.1. Second Injury Fund.
(a)
There is hereby created a fund to be known as the "Second Injury Fund," to be held
and disbursed by the Industrial Commission as hereinafter provided.
For the purpose of providing money for said fund the Industrial Commission may assess
against the employer or its insurance carrier the payment of not to exceed two hundred fifty
NC General Statutes - Chapter 97
46
dollars ($250.00) for the loss, or loss of use, of each minor member in every case of a permanent
partial disability where there is such loss, and shall assess not to exceed seven hundred fifty
dollars ($750.00) for fifty percent (50%) or more loss or loss of use of each major member,
defined as back, foot, leg, hand, arm, eye, or hearing.
(b)
The Industrial Commission shall disburse moneys from the Second Injury Fund in
unusual cases of second injuries as follows:
(1)
To pay additional compensation in cases of second injuries referred to in G.S.
97-33; provided, however, that the original injury and the subsequent injury
were each at least twenty percent (20%) of the entire member; and, provided
further, that such additional compensation, when added to the compensation
awarded under said section, shall not exceed the amount which would have
been payable for both injuries had both been sustained in the subsequent
accident.
(2)
To pay additional compensation to an injured employee who has sustained
permanent total disability in the manner referred to in the second paragraph of
G.S. 97-35, which shall be in addition to the compensation awarded under
said section; provided, however, that such additional compensation, when
added to the compensation awarded under said section, shall not exceed the
compensation for permanent total disability as provided for in G.S. 97-29.
(3)
To pay compensation and medical expense in cases of permanent and total
disability resulting from an injury to the brain or spinal cord in the manner and
to the extent hereinafter provided.
The additional compensation and treatment expenses herein provided for shall be paid out of
the Second Injury Fund exclusively and only to the extent to which the assets of such fund shall
permit.
(c)
In addition to payments for the purposes hereinabove set forth, the Industrial
Commission may, in its discretion, make payments from said fund for the following purposes
and under the following conditions:
(1)
In any case in which total and permanent disability due to paralysis or loss of
mental capacity has resulted from an injury to the brain or spinal cord, the
Industrial Commission may, in its discretion enter an award and pay
compensation and reasonable and necessary medical, nursing, hospital,
institutional, equipment, and other treatment expenses from the Second Injury
Fund during the life of the injured employee in cases where the injury giving
rise to such disability occurred prior to July 1, 1953, and the last payment of
compensation has been made subsequent to January 1, 1941. Such
compensation and medical expense shall be paid only from April 4, 1947, and
after the employer's liability for compensation and treatment expense has
ended, and in every case in which the injury resulting in paralysis due to
injury to the spinal cord occurred subsequent to April 4, 1947, and prior to
July 1, 1953, the liability of the employer and his insurance carrier to pay
compensation and medical expense during the life of the injured employee
shall not be affected by this section.
(2)
When compensation is allowed from the fund in any case under subdivision
(1) of subsection (c), the Commission may in its discretion authorize payment
of medical, nursing, hospital, equipment, and other treatment expenses
NC General Statutes - Chapter 97
47
incurred prior to the date compensation is allowed and after the employer's
liability has ended if funds are reasonably available in the Second Injury Fund
for such purpose after paying claims in cases of second injuries as specified in
G.S. 97-33 and 97-35. Should the fund be insufficient to pay both
compensation and treatment expenses, then the said expenses may, in the
discretion of the Commission, be paid first and compensation thereafter
according to the reasonable availability of funds in the fund. (1953, c. 1135, s.
2; 1957, c. 1396, s. 4; 1963, c. 450, s. 3; 1977, c. 457; 1991, c. 703, s. 11;
1993 (Reg. Sess., 1994), c. 679, s. 6.1.)
§ 97-41. Repealed by Session Laws 1973, c. 1308, s. 5.
§ 97-42. Deduction of payments.
Payments made by the employer to the injured employee during the period of his disability,
or to his dependents, which by the terms of this Article were not due and payable when made,
may, subject to the approval of the Commission be deducted from the amount to be paid as
compensation. Provided, that in the case of disability such deductions shall be made by
shortening the period during which compensation must be paid, and not by reducing the amount
of the weekly payment. Unless otherwise provided by the plan, when payments are made to an
injured employee pursuant to an employer-funded salary continuation, disability or other income
replacement plan, the deduction shall be calculated from payments made by the employer in each
week during which compensation was due and payable, without any carry-forward or carry-back
of credit for amounts paid in excess of the compensation rate in any given week. (1929, c. 120, s.
42; 1993 (Reg. Sess., 1994), c. 679, s. 3.7.)
§ 97-42.1. Credit for unemployment benefits.
If an injured employee has received unemployment benefits under the Employment Security
Law for any week with respect to which he is entitled to workers' compensation benefits for
temporary total or permanent and total disability, the employment benefits paid for such weeks
may be deducted from the award to be paid as compensation. If an injured employee has
received unemployment benefits for any week with respect to which he is entitled to workers'
compensation benefits for partial disability as provided in G.S. 97-30, the unemployment
benefits paid for such weeks may be deducted from the award to be paid only to the extent that
the sum of the unemployment benefits and workers' compensation payable for such week
exceeds two-thirds of the injured employee's average weekly wages as determined by the
Commission in accordance with G.S. 97-2(5). Benefits payable under G.S. 97-31 for permanent
partial disability or other permanent injury shall not be subject to reduction because of the receipt
of unemployment benefits. (1985, c. 616, s. 1.)
§ 97-43. Commission may prescribe monthly or quarterly payments.
The Industrial Commission, upon application of either party, may, in its discretion, having
regard to the welfare of the employee and the convenience of the employer, authorize
compensation to be paid monthly or quarterly instead of weekly. (1929, c. 120, s. 43.)
§ 97-44. Lump sums.
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48
Whenever any weekly payment has been continued for not less than six weeks, the liability
therefor may, in unusual cases, where the Industrial Commission deems it to be to the best
interest of the employee or his dependents, or where it will prevent undue hardships on the
employer or his insurance carrier, without prejudicing the interests of the employee or his
dependents, be redeemed, in whole or in part, by the payment by the employer of a lump sum
which shall be fixed by the Commission, but in no case to exceed the uncommuted value of the
future installments which may be due under this Article. The Commission, however, in its
discretion, may at any time in the case of a minor who has received permanently disabling
injuries either partial or total provide that he be compensated, in whole or in part, by the payment
of a lump sum, the amount of which shall be fixed by the Commission, but in no case to exceed
the uncommuted value of the future installments which may be due under this Article. (1929, c.
120, s. 44; 1963, c. 450, s. 4; 1975, c. 255.)
§ 97-45. Reducing to judgment outstanding liability of insurance carriers withdrawing
from State.
Upon the withdrawal of any insurance carrier from doing business in the State that has any
outstanding liability under the Workers' Compensation Act, the Insurance Commissioner shall
immediately notify the North Carolina Industrial Commission, and thereupon the said North
Carolina Industrial Commission shall issue an award against said insurance carrier and commute
the installments due the injured employee or employees, and immediately have said award
docketed in the superior court of the county in which the claimant resides, and the said North
Carolina Industrial Commission shall then cause suit to be brought on said judgment in the state
of the residence of any such insurance carrier, and the proceeds from said judgment after
deducting the cost, if any, of the proceeding, shall be turned over to the injured employee, or
employees, taking from such employee, or employees, the proper receipt in satisfaction of his
claim. (1933, c. 474; 1979, c. 714, s. 2.)
§ 97-46. Lump sum payments to trustee; receipt to discharge employer.
Whenever the Industrial Commission deems it expedient any lump sum, subject to the
provisions of G.S. 97-44, shall be paid by the employer to some suitable person or corporation
appointed by the superior court in the county wherein the accident occurred, as trustee, to
administer the same for the benefit of the person entitled thereto, in the manner provided by the
Commission. The receipt of such trustee for the amount as paid shall discharge the employer or
anyone else who is liable therefor. (1929, c. 120, s. 45.)
§ 97-47. Change of condition; modification of award.
Upon its own motion or upon the application of any party in interest on the grounds of a
change in condition, the Industrial Commission may review any award, and on such review may
make an award ending, diminishing, or increasing the compensation previously awarded, subject
to the maximum or minimum provided in this Article, and shall immediately send to the parties a
copy of the award. No such review shall affect such award as regards any moneys paid but no
such review shall be made after two years from the date of the last payment of compensation
pursuant to an award under this Article, except that in cases in which only medical or other
treatment bills are paid, no such review shall be made after 12 months from the date of the last
payment of bills for medical or other treatment, paid pursuant to this Article. (1929, c. 120, s. 46;
1931, c. 274, s. 6; 1947, c. 823; 1973, c. 1060, s. 2.)
NC General Statutes - Chapter 97
49
§ 97-47.1. Payment without prejudice; limitations period.
When the employer has paid compensation without prejudice but timely contested liability as
provided in G.S. 97-18(d), the right, if any, to further indemnity compensation and medical
compensation shall terminate two years after the employer's last payment of medical or
indemnity compensation, whichever last occurs, unless the employee files with the Commission
a claim for further compensation prior to the expiration of this period. (1993 (Reg. Sess., 1994),
c. 679, s. 3.5.)
§ 97-48. Receipts relieving employer; payment to minors; when payment of claims to
dependents subsequent in right discharges employer.
(a)
Whenever payment of compensation is made to a widow or widower for her or his
use, or for her or his use and the use of the child or children, the written receipt thereof of such
widow or widower shall acquit the employer: Provided, however, that in order to protect the
interests of minors or incompetents the Industrial Commission may at its discretion change the
terms of any award with respect to whom compensation for the benefit of such minors or
incompetents shall be paid.
(b)
Whenever payment is made to any person 18 years of age or over, the written receipt
of such person shall acquit the employer.
(c)
Payment of death benefits by an employer in good faith to a dependent subsequent in
right to another or other dependents shall protect and discharge the employer, unless and until
such dependent or dependents prior in right shall have given notice of his or their claims. In case
the employer is in doubt as to the respective rights of rival claimants, he may apply to the
Industrial Commission to decide between them.
(d)
A minor employee under the age of 18 years may sign agreements and receipts for
payments of compensation for temporary total disability, and such agreements and receipts
executed by such minor shall acquit the employer. Where the injury results in a permanent
disability and the sum to be paid does not exceed five hundred dollars ($500.00) the minor
employee may execute agreements and sign receipts and such agreements and receipts shall
acquit the employer; provided, that when deemed necessary the Commission may require the
signature of a parent or person standing in place of a parent. (1929, c. 120, s. 47; 1931, c. 274, s.
7; 1945, c. 766.)
§ 97-49. Benefits of mentally incompetent or minor employees under 18 may be paid to a
trustee, etc.
If an injured employee is mentally incompetent or is under 18 years of age at the time when
any right or privilege accrues to him under this Article, his guardian, trustee or committee may in
his behalf claim and exercise such right or privilege. (1929, c. 120, s. 48.)
§ 97-50. Limitation as against minors or mentally incompetent.
No limitation of time provided in this Article for the giving of notice or making claim under
this Article shall run against any person who is mentally incompetent, or a minor dependent, as
long as he has no guardian, trustee, or committee. (1929, c. 120, s. 49.)
§ 97-51. Joint employment; liabilities.
NC General Statutes - Chapter 97
50
Whenever an employee, for whose injury or death compensation is payable under this
Article, shall at the time of the injury be in joint service of two or more employers subject to this
Article, such employers shall contribute to the payment of such compensation in proportion to
their wages liability to such employee; provided, however, that nothing in this section shall
prevent any reasonable arrangement between such employers for a different distribution as
between themselves of the ultimate burden of compensation. (1929, c. 120, s. 50.)
§ 97-52. Occupational disease made compensable; "accident" defined.
Disablement or death of an employee resulting from an occupational disease described in
G.S. 97-53 shall be treated as the happening of an injury by accident within the meaning of the
North Carolina Workers' Compensation Act and the procedure and practice and compensation
and other benefits provided by said act shall apply in all such cases except as hereinafter
otherwise provided. The word "accident," as used in the Workers' Compensation Act, shall not
be construed to mean a series of events in employment, of a similar or like nature, occurring
regularly, continuously or at frequent intervals in the course of such employment, over extended
periods of time, whether such events may or may not be attributable to fault of the employer and
disease attributable to such causes shall be compensable only if culminating in an occupational
disease mentioned in and compensable under this Article: Provided, however, no compensation
shall be payable for asbestosis and/or silicosis as hereinafter defined if the employee, at the time
of entering into the employment of the employer by whom compensation would otherwise be
payable, falsely represented himself in writing as not having previously been disabled or laid off
because of asbestosis or silicosis. (1935, c. 123; 1979, c. 714, s. 2.)
§ 97-53. (See editor's note on condition precedent) Occupational diseases enumerated;
when due to exposure to chemicals.
The following diseases and conditions only shall be deemed to be occupational diseases
within the meaning of this Article:
(1)
Anthrax.
(2)
Arsenic poisoning.
(3)
Brass poisoning.
(4)
Zinc poisoning.
(5)
Manganese poisoning.
(6)
Lead poisoning. Provided the employee shall have been exposed to the hazard
of lead poisoning for at least 30 days in the preceding 12 months' period; and,
provided further, only the employer in whose employment such employee was
last injuriously exposed shall be liable.
(7)
Mercury poisoning.
(8)
Phosphorus poisoning.
(9)
Poisoning by carbon bisulphide, menthanol, naphtha or volatile halogenated
hydrocarbons.
(10) Chrome ulceration.
(11) Compressed-air illness.
(12) Poisoning by benzol, or by nitro and amido derivatives of benzol
(dinitrolbenzol, anilin, and others).
(13) Any disease, other than hearing loss covered in another subdivision of this
section, which is proven to be due to causes and conditions which are
NC General Statutes - Chapter 97
51
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
characteristic of and peculiar to a particular trade, occupation or employment,
but excluding all ordinary diseases of life to which the general public is
equally exposed outside of the employment.
Epitheliomatous cancer or ulceration of the skin or of the corneal surface of
the eye due to tar, pitch, bitumen, mineral oil, or paraffin, or any compound,
product, or residue of any of these substances.
Radium poisoning or disability or death due to radioactive properties of
substances or to roentgen rays, X rays or exposure to any other source of
radiation; provided, however, that the disease under this subdivision shall be
deemed to have occurred on the date that disability or death shall occur by
reason of such disease.
Blisters due to use of tools or appliances in the employment.
Bursitis due to intermittent pressure in the employment.
Miner's nystagmus.
Bone felon due to constant or intermittent pressure in employment.
Synovitis, caused by trauma in employment.
Tenosynovitis, caused by trauma in employment.
Carbon monoxide poisoning.
Poisoning by sulphuric, hydrochloric or hydrofluoric acid.
Asbestosis.
Silicosis.
Psittacosis.
Undulant fever.
Loss of hearing caused by harmful noise in the employment. The following
rules shall be applicable in determining eligibility for compensation and the
period during which compensation shall be payable:
a.
The term "harmful noise" means sound in employment capable of
producing occupational loss of hearing as hereinafter defined. Sound
of an intensity of less than 90 decibels, A scale, shall be deemed
incapable of producing occupational loss of hearing as defined in this
section.
b.
"Occupational loss of hearing" shall mean a permanent sensorineural
loss of hearing in both ears caused by prolonged exposure to harmful
noise in employment. Except in instances of preexisting loss of
hearing due to disease, trauma, or congenital deafness in one ear, no
compensation shall be payable under this subdivision unless prolonged
exposure to harmful noise in employment has caused loss of hearing in
both ears as hereinafter provided.
c.
No compensation benefits shall be payable for temporary total or
temporary partial disability under this subdivision and there shall be no
award for tinnitus or a psychogenic hearing loss.
d.
An employer shall become liable for the entire occupational hearing
loss to which his employment has contributed, but if previous deafness
is established by a hearing test or other competent evidence, whether
or not the employee was exposed to harmful noise within six months
preceding such test, the employer shall not be liable for previous loss
NC General Statutes - Chapter 97
52
e.
f.
g.
so established, nor shall he be liable for any loss for which
compensation has previously been paid or awarded and the employer
shall be liable only for the difference between the percent of
occupational hearing loss determined as of the date of disability as
herein defined and the percentage of loss established by the
preemployment and audiometric examination excluding, in any event,
hearing losses arising from nonoccupational causes.
In the evaluation of occupational hearing loss, only the hearing levels
at the frequencies of 500, 1,000, 2,000, and 3,000 cycles per second
shall be considered. Hearing losses for frequencies below 500 and
above 3,000 cycles per second are not to be considered as constituting
compensable hearing disability.
The employer liable for the compensation in this section shall be the
employer in whose employment the employee was last exposed to
harmful noise in North Carolina during a period of 90 working days or
parts thereof, and an exposure during a period of less than 90 working
days or parts thereof shall be held not to be an injurious exposure;
provided, however, that in the event an insurance carrier has been on
the risk for a period of time during which an employee has been
injuriously exposed to harmful noise, and if after insurance carrier
goes off the risk said employee has been further exposed to harmful
noise, although not exposed for 90 working days or parts thereof so as
to constitute an injurious exposure, such carrier shall, nevertheless, be
liable.
The percentage of hearing loss shall be calculated as the average, in
decibels, of the thresholds of hearing for the frequencies of 500, 1,000,
2,000, and 3,000 cycles per second. Pure tone air conduction
audiometric instruments, properly calibrated according to accepted
national standards such as American Standards Association, Inc.,
(ASA), International Standards Organization (ISO), or American
National Standards Institute, Inc., (ANSI), shall be used for measuring
hearing loss. If more than one audiogram is taken, the audiogram
having the lowest threshold will be used to calculate occupational
hearing loss. If the losses of hearing average 15 decibels (26 db if
ANSI or ISO) or less in the four frequencies, such losses of hearing
shall not constitute any compensable hearing disability. If the losses of
hearing average 82 decibels (93 db if ANSI or ISO) or more in the four
frequencies, then the same shall constitute and be total or one hundred
percent (100%) compensable hearing loss. In measuring hearing
impairment, the lowest measured losses in each of the four frequencies
shall be added together and divided by four to determine the average
decibel loss. For each decibel of loss exceeding 15 decibels (26 db if
ANSI or ISO) an allowance of one and one-half percent (1 1/2%) shall
be made up to the maximum of one hundred percent (100%) which is
reached at 82 decibels (93 db if ANSI or ISO). In determining the
binaural percentage of loss, the percentage of impairment in the better
NC General Statutes - Chapter 97
53
ear shall be multiplied by five. The resulting figure shall be added to
the percentage of impairment in the poorer ear, and the sum of the two
divided by six. The final percentage shall represent the binaural
hearing impairment.
h.
There shall be payable for total occupational loss of hearing in both
ears 150 weeks of compensation, and for partial occupational loss of
hearing in both ears such proportion of these periods of payment as
such partial loss bears to total loss.
i.
No claim for compensation for occupational hearing loss shall be filed
until after six months have elapsed since exposure to harmful noise
with the last employer. The last day of such exposure shall be the date
of disability. The regular use of employer-provided protective devices
capable of preventing loss of hearing from the particular harmful noise
where the employee works shall constitute removal from exposure to
such particular harmful noise.
j.
No consideration shall be given to the question of whether or not the
ability of an employee to understand speech is improved by the use of
a hearing aid. The North Carolina Industrial Commission may order
the employer to provide the employee with an original hearing aid if it
will materially improve the employee's ability to hear.
k.
No compensation benefits shall be payable for the loss of hearing
caused by harmful noise after October 1, 1971, if employee fails to
regularly utilize employer-provided protection device or devices,
capable of preventing loss of hearing from the particular harmful noise
where the employee works.
(29) (See editor's note on condition precedent) Infection with smallpox,
infection with vaccinia, or any adverse medical reaction when the infection or
adverse reaction is due to the employee receiving in employment vaccination
against smallpox incident to the Administration of Smallpox Countermeasures
by Health Professionals, section 304 of the Homeland Security Act, Pub. L.
No. 107-296 (Nov. 25, 2002) (to be codified at 42 U.S.C. § 233(p)), or when
the infection or adverse medical reaction is due to the employee being
exposed to another employee vaccinated as described in this subdivision.
Occupational diseases caused by chemicals shall be deemed to be due to exposure of an
employee to the chemicals herein mentioned only when as a part of the employment such
employee is exposed to such chemicals in such form and quantity, and used with such frequency
as to cause the occupational disease mentioned in connection with such chemicals. (1935, c. 123;
1949, c. 1078; 1953, c. 1112; 1955, c. 1026, s. 10; 1957, c. 1396, s. 6; 1963, c. 553, s. 1; c. 965;
1971, c. 547, s. 1; c. 1108, s. 1; 1973, c. 760, ss. 1, 2; 1975, c. 718, s. 4; 1987, c. 729, ss. 11, 12;
1991, c. 703, s. 10; 2003-169, s. 2.)
§ 97-54. "Disablement" defined.
The term "disablement" as used in this Article as applied to cases of asbestosis and silicosis
means the event of becoming actually incapacitated because of asbestosis or silicosis to earn, in
the same or any other employment, the wages which the employee was receiving at the time of
his last injurious exposure to asbestosis or silicosis; but in all other cases of occupational disease
NC General Statutes - Chapter 97
54
"disablement" shall be equivalent to "disability" as defined in G.S. 97-2(9). (1935, c. 123; 1955,
c. 525, s. 1.)
§ 97-55. "Disability" defined.
The term "disability" as used in this Article means the state of being incapacitated as the term
is used in defining "disablement" in G.S. 97-54. (1935, c. 123.)
§ 97-56. Limitation on compensable diseases.
The provisions of this Article shall apply only to cases of occupational disease in which the
last exposure in an occupation subject to the hazards of such diseases occurred on or after March
26, 1935. (1935, c. 123.)
§ 97-57. Employer liable.
In any case where compensation is payable for an occupational disease, the employer in
whose employment the employee was last injuriously exposed to the hazards of such disease,
and the insurance carrier, if any, which was on the risk when the employee was so last exposed
under such employer, shall be liable.
For the purpose of this section when an employee has been exposed to the hazards of
asbestosis or silicosis for as much as 30 working days, or parts thereof, within seven consecutive
calendar months, such exposure shall be deemed injurious but any less exposure shall not be
deemed injurious; provided, however, that in the event an insurance carrier has been on the risk
for a period of time during which an employee has been injuriously exposed to the hazards of
asbestosis or silicosis, and if after insurance carrier goes off the risk said employee is further
exposed to the hazards of asbestosis or silicosis, although not so exposed for a period of 30 days
or parts thereof so as to constitute a further injurious exposure, such carrier shall, nevertheless,
be liable. (1935, c. 123; 1945, c. 762; 1957, c. 1396, s. 7.)
§ 97-58. Time limit for filing claims.
(a)
Repealed by Session Laws 1987, c. 729, s. 13.
(b)
The report and notice to the employer as required by G.S. 97-22 shall apply in all
cases of occupational disease except in case of asbestosis, silicosis, or lead poisoning. The time
of notice of an occupational disease shall run from the date that the employee has been advised
by competent medical authority that he has same.
(c)
The right to compensation for occupational disease shall be barred unless a claim be
filed with the Industrial Commission within two years after death, disability, or disablement as
the case may be. Provided, however, that the right to compensation for radiation injury, disability
or death shall be barred unless a claim is filed within two years after the date upon which the
employee first suffered incapacity from the exposure to radiation and either knew or in the
exercise of reasonable diligence should have known that the occupational disease was caused by
his present or prior employment. (1935, c. 123; 1945, c. 762; 1955, c. 525, s. 6; 1963, c. 553, s.
2; 1973, c. 1060, s. 3; 1981, c. 734, s. 1; 1987, c. 729, s. 13.)
§ 97-59. Employer to pay for treatment.
Medical compensation shall be paid by the employer in cases in which awards are made for
disability or damage to organs as a result of an occupational disease after bills for same have
been approved by the Industrial Commission.
NC General Statutes - Chapter 97
55
In case of a controversy arising between the employer and employee relative to the
continuance of medical, surgical, hospital or other treatment, the Industrial Commission may
order such further treatments as may in the discretion of the Commission be necessary. (1935, c.
123; 1945, c. 762; 1973, c. 1061; 1981, c. 339; 1991, c. 703, s. 5.)
§ 97-60: Repealed by Session Laws 2003-284, s. 10.33(a), effective July 1, 2003.
§ 97-61. Rewritten as §§ 97-61.1 to 97-61.7.
§ 97-61.1. First examination of and report on employee having asbestosis or silicosis.
When the Industrial Commission is advised by an employer or employee that an employee
has or allegedly has asbestosis or silicosis, the employee, when ordered by the Industrial
Commission, shall submit to X rays and a physical examination by the advisory medical
committee or other designated qualified physician who is not a member of the advisory medical
committee. The employer shall pay the expenses connected with the examination by the advisory
medical committee or other designated qualified physician who is not a member of the advisory
medical committee in such amounts as shall be directed by the Industrial Commission. Within 30
days after the completion of the examination, the advisory medical committee or other
designated qualified physician shall submit a written report to the Industrial Commission setting
forth:
(1)
The X rays and clinical procedures used.
(2)
Whether or not the claimant has contracted asbestosis or silicosis.
(3)
The advisory medical committee's or designated qualified physician's opinion
expressed in percentages of the impairment of the employee's ability to
perform normal labor in the same or any other employment.
(4)
Any other matter deemed pertinent.
When a competent physician certifies to the Industrial Commission that the employee's
physical condition is such that his movement to the place of examination ordered by the
Industrial Commission as herein provided in G.S. 97-61.1, 97-61.3 and 97-61.4 would be
harmful or injurious to the health of the employee, the Industrial Commission shall cause the
examination of the employee to be made by the advisory medical committee or other designated
qualified physician as herein provided at some place in the vicinity of the residence of the
employee suitable for the purposes of making such examination. (1935, c. 123; 1945, c. 762;
1955, c. 525, s. 2; 1973, c. 476, s. 128; 1989, c. 727, s. 219(15); 1997-443, s. 11A.37; 2003-284,
s. 10.33(b).)
§ 97-61.2. Filing of first report; right of hearing; effect of report as testimony.
The advisory medical committee shall file its report in triplicate with the Industrial
Commission, which shall send one copy thereof to the claimant and one copy thereof to the
employer by registered mail or certified mail. Unless within 30 days from receipt of the copy of
said report the claimant and employer, or either of them, shall request the Industrial Commission
in writing to set the case for hearing for the purpose of examining and cross-examining the
members of the advisory medical committee respecting the report of said committee, and for the
purpose of introducing additional testimony, said report shall become a part of the record of the
case and shall be accepted by the Industrial Commission as expert medical testimony to be
NC General Statutes - Chapter 97
56
considered as such and in connection with all the evidence in the case in arriving at its decision.
(1935, c. 123; 1945, c. 762; 1955, c. 525, s. 2; 1963, c. 450, s. 5.)
§ 97-61.3. Second examination and report.
As soon as practicable after the expiration of one year following the initial examination by
the advisory medical committee and when ordered by the Industrial Commission, the employee
shall again appear before the advisory medical committee, at least one of whom shall conduct the
examination, and the member or members of the advisory medical committee conducting the
examination shall forward the X rays and findings to the member or members of the committee
not present for the physical examination. Within 30 days after the completion of the examination,
the advisory medical committee shall make a written report to the Industrial Commission signed
by all of its members, setting forth any change since the first report in the employee's condition
which is due to asbestosis or silicosis, said report to be filed in triplicate with the Industrial
Commission, which shall send one copy thereof to the claimant, and one copy to the employer by
registered mail or certified mail. The claimant and employer, or either of them, shall have the
right only at the final hearing provided for in G.S. 97-61.4 to examine or cross-examine the
members of the advisory medical committee respecting the second report of the committee.
(1935, c. 123; 1945, c. 762; 1955, c. 525, s. 2; 1959, c. 863, s. 2.)
§ 97-61.4. Third examination and report.
As soon as practicable after the expiration of two years from the first examination and when
ordered by the Industrial Commission, the employee shall appear before the advisory medical
committee, or at least two of them, for final X rays and physical examination. Upon completion
of this examination and within 30 days, the advisory medical committee shall make a written
report setting forth:
(1)
The X rays and clinical procedures used by the committee.
(2)
To what extent, if any, has the damage to the employee's lungs due to
asbestosis or silicosis changed since the first examination.
(3)
The opinion of the committee, expressed in percentages, with respect to the
extent of impairment of the employee's ability to earn in the same or any other
employment the wages which the employee was receiving at the time of his
last injurious exposure to asbestosis or silicosis.
(4)
Any other matter deemed pertinent by the committee.
Said report shall be filed in triplicate with the Industrial Commission which shall send one
copy thereof to the claimant and one copy to the employer by registered mail or certified mail.
(1935, c. 123; 1945, c. 762; 1955, c. 525, s. 2; 1959, c. 863, s. 3.)
§ 97-61.5.
Hearing after first examination and report; removal of employee from
hazardous occupation; compensation upon removal from hazardous occupation.
(a)
After the employer and employee have received notice of the first committee report,
the Industrial Commission, unless it has already approved an agreement between the employer
and employee, shall set the matter for hearing at a time and place to be decided by it, to hear any
controverted questions, determine if and to whom liability attaches, and where appropriate, file a
written opinion with its findings of fact and conclusions of law and cause its award to be issued
thereon, all of which shall be subject to modification as provided in G.S. 97-61.6.
NC General Statutes - Chapter 97
57
(b)
If the Industrial Commission finds at the first hearing that the employee has either
asbestosis or silicosis or if the parties enter into an agreement to the effect that the employee has
silicosis or asbestosis, it shall by order remove the employee from any occupation which exposes
him to the hazards of asbestosis or silicosis, and if the employee thereafter engages in any
occupation which exposes him to the hazards of asbestosis or silicosis without having obtained
the written approval of the Industrial Commission as provided in G.S. 97-61.7, neither he, his
dependents, personal representative nor any other person shall be entitled to any compensation
for disablement or death resulting from asbestosis or silicosis; provided, that if the employee is
removed from the industry the employer shall pay or cause to be paid as in this subsection
provided to the employee affected by such asbestosis or silicosis a weekly compensation equal to
sixty-six and two-thirds percent (66 2/3%) of his average weekly wages before removal from the
industry, but not more than the amount established annually to be effective October 1 as
provided in G.S. 97-29 or less than thirty dollars ($30.00) a week, which compensation shall
continue for a period of 104 weeks. Payments made under this subsection shall be credited on the
amounts payable under any final award in the cause entered under G.S. 97-61.6. (1935, c. 123;
1945, c. 762; 1955, c. 525, s. 2; c. 1354; 1957, c. 1217; c. 1396, s. 8; 1963, c. 604, s. 6; 1967, c.
84, s. 7; 1969, c. 143, s. 6; 1971, c. 281, s. 5; 1973, c. 515, s. 6; c. 759, s. 5; 1981, c. 276, s. 1; c.
378, s. 1.)
§ 97-61.6. Hearing after third examination and report; compensation for disability and
death from asbestosis or silicosis.
After receipt by the employer and employee of the advisory medical committee's third
report, the Industrial Commission, unless it has approved an agreement between the employee
and employer, shall set a final hearing in the cause, at which it shall receive all competent
evidence bearing on the cause, and shall make a final disposition of the case, determining what
compensation, if any, the employee is entitled to receive in addition to the 104 weeks already
received.
Where the incapacity for work resulting from asbestosis or silicosis is found to be total, the
employer shall pay, or cause to be paid, to the injured employee during such total disability a
weekly compensation in accordance with G.S. 97-29.
When the incapacity for work resulting from asbestosis or silicosis is partial, the employer
shall pay, or cause to be paid, to the affected employee, a weekly compensation equal to sixty-six
and two-thirds percent (66 2/3%) of the difference between his average weekly wages at the time
of his last injurious exposure, and the average weekly wages which he is able to earn thereafter,
but not more than the amount established annually to be effective October 1 as provided in G.S.
97-29, a week, and provided that the total compensation so paid shall not exceed a period of 196
weeks, in addition to the 104 weeks for which the employee has already been compensated.
Provided, however, should death result from asbestosis or silicosis within two years from the
date of last exposure, or should death result from asbestosis or silicosis, or from a secondary
infection or diseases developing from asbestosis or silicosis within 350 weeks from the date of
last exposure and while the employee is entitled to compensation for disablement due to
asbestosis or silicosis, either partial or total, then in either of these events, the employer shall
pay, or cause to be paid compensation in accordance with G.S. 97-38.
Provided further that if the employee has asbestosis or silicosis and dies from any other
cause, the employer shall pay, or cause to be paid by one of the methods set forth in G.S. 97-38
compensation for any remaining portion of the 104 weeks specified in G.S. 97-61.5 for which the
NC General Statutes - Chapter 97
58
employee has not previously been paid compensation, and in addition shall pay compensation for
such number of weeks as the percentage of disability of the employee bears to 196 weeks. If the
employee was totally disabled as a result of asbestosis or silicosis, compensation shall be paid for
any remaining portion of the 104 weeks specified in G.S. 97-61.5 for which the employee has
not previously been paid compensation, and in addition shall be paid for an additional 300
weeks. (1935, c. 123; 1945, c. 762; 1955, c. 525, s. 2; c. 1354; 1957, c. 1271; 1963, c. 604, s. 7;
1965, c. 907; 1967, c. 84, s. 8; 1969, c. 143, s. 7; 1971, c. 281, s. 6; c. 631; 1973, c. 515, s. 7; c.
759, s. 6; c. 1308, ss. 6, 7; 1979, c. 246; 1981, c. 276, s. 1.)
§ 97-61.7. Waiver of right to compensation as alternative to forced change of occupation.
An employee who has been compensated under the terms of G.S. 97-61.5(b) as an alternative
to forced change of occupation, may, subject to the approval of the Industrial Commission,
waive in writing his right to further compensation for any aggravation of his condition that may
result from his continuing in an occupation exposing him to the hazards of asbestosis or silicosis,
in which case payment of all compensation awarded previous to the date of the waiver as
approved by the Industrial Commission shall bar any further claims by the employee, or anyone
claiming through him, provided, that in the event of total disablement or death as a result of
asbestosis or silicosis with which the employee was so affected, compensation shall nevertheless
be payable, but in no case, whether for disability or death or both, for a longer period than 100
weeks in addition to the 104 weeks already paid. Such written waiver must be filed with the
Industrial Commission, and the Commission shall keep a record of each waiver, which record
shall be open to the inspection of any interested person. (1935, c. 123; 1945, c. 762; 1955, c. 525,
s. 2.)
§ 97-62. "Silicosis" and "asbestosis" defined.
The word "silicosis" shall mean the characteristic fibrotic condition of the lungs caused by
the inhalation of dust of silica or silicates. "Asbestosis" shall mean a characteristic fibrotic
condition of the lungs caused by the inhalation of asbestos dust. (1935, c. 123.)
§ 97-63. Period necessary for employee to be exposed.
Compensation shall not be payable for disability or death due to silicosis and/or asbestosis
unless the employee shall have been exposed to the inhalation of dust of silica or silicates or
asbestos dust in employment for a period of not less than two years in this State, provided no part
of such period of two years shall have been more than 10 years prior to the last exposure. (1935,
c. 123.)
§ 97-64. General provisions of act to control as regards benefits.
Except as herein otherwise provided, in case of disablement or death from silicosis and/or
asbestosis, compensation shall be payable in accordance with the provisions of the North
Carolina Workers' Compensation Act. (1935, c. 123; 1979, c. 714, s. 2.)
§ 97-65. Reduction of rate where tuberculosis develops.
In case of disablement or death due primarily from silicosis and/or asbestosis and
complicated with tuberculosis of the lungs compensation shall be payable as hereinbefore
provided, except that the rate of payments may be reduced one sixth. (1935, c. 123.)
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§ 97-66. Claim where benefits are discontinued.
Where compensation payments have been made and discontinued, and further compensation
is claimed, the claim for further compensation shall be made within two years after the last
payment in all cases of occupational disease, provided, that claims for further compensation for
asbestosis or silicosis shall be governed by the final award as set forth in G.S. 97-61.6. (1935, c.
123; 1945, c. 762; 1955, c. 525, s. 3; 1987, c. 729, s. 14.)
§ 97-67. Postmortem examinations; notice to next of kin and insurance carrier.
Upon the filing of a claim for death from an occupational disease where in the opinion of the
Industrial Commission a postmortem examination is necessary to accurately ascertain the cause
of death, such examination shall be ordered by the Industrial Commission. A full report of such
examination shall be certified to the Industrial Commission. The surviving spouse or next kin
and the employer or his insurance carrier, if their identity and whereabouts can be reasonably
ascertained, shall be given reasonable notice of the time and place of such postmortem
examination, and, if present at such examination, shall be given an opportunity to witness the
same. Any such person may be present at and witness such examination either in person or
through a duly authorized representative. If such examination is not consented to by the
surviving husband or wife or next of kin, all right to compensation shall cease. (1935, c. 123.)
§ 97-68. Controverted medical questions.
The Industrial Commission may at its discretion refer to the advisory medical committee
controverted medical questions arising out of occupational disease claims other than asbestosis
or silicosis. (1935, c. 123; 1955, c. 525, s. 4.)
§ 97-69. Examination by advisory medical committee; inspection of medical reports.
The advisory medical committee, upon reference to it of a case of occupational disease shall
notify the employee, or, in case he is dead, his dependents or personal representative, and his
employer to appear before the advisory medical committee at a time and place stated in the
notice. If the employee be living, he shall appear before the advisory medical committee at the
time and place specified then or thereafter and he shall submit to such examinations including
clinical and X-ray examinations as the advisory medical committee may require. The employee,
or, if he be dead, the claimant and the employer shall be entitled to have present at all such
examinations, a physician admitted to practice medicine in the State who shall be given every
reasonable facility for observing every such examination whose services shall be paid for by the
claimant or by the employer who engaged his services. If a physician admitted to practice
medicine in the State shall certify that the employee is physically unable to appear at the time
and place designated by the advisory medical committee, such committee may, upon the advice
of the Industrial Commission, and on notice to the employer, change the place and/or time of the
examination so as to reasonably facilitate the examination of the employee, and in any such case
the employer shall furnish transportation and provide for other reasonably necessary expenses
incidental to necessary travel. The claimant and the employer shall produce to the advisory
medical committee all reports of medical and X-ray examinations which may be in their
respective possession or control showing the past or present condition of the employee to assist
the advisory medical committee in reaching its conclusions. Provided that this section shall not
apply to a living employee who has contracted asbestosis or silicosis. (1935, c. 123; 1955, c. 525,
s. 5.)
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§ 97-70. Report of committee to Industrial Commission.
The advisory medical committee, shall, as soon as practicable after it has completed its
consideration of a case, report to the Industrial Commission its opinion regarding all medical
questions involved in the case. The advisory medical committee shall include in its report a
statement of what, if any, physician or physicians were present at the examination on behalf of
the claimant or employer and what, if any, medical reports and X rays were produced by or on
behalf of the claimant or employer. (1935, c. 123.)
§ 97-71. Filing report; right of hearing on report.
The advisory medical committee shall file its report in triplicate with the Industrial
Commission, which shall send one copy thereof to the claimant and one copy to the employer by
registered mail. Unless within 30 days from receipt of the copy of said report the claimant and/or
employer shall request the Industrial Commission in writing to set the case for further hearing for
the purpose of examining and/or cross-examining the members of the advisory medical
committee respecting the report of said committee, said report shall become a part of the record
of the case and shall be accepted by the Industrial Commission as expert medical testimony to be
considered as such in connection with all the evidence in the case in arriving at its decision.
(1935, c. 123.)
§ 97-72. Appointment of advisory medical committee; terms of office; duties and functions;
salaries and expenses.
(a)
There shall be an advisory medical committee consisting of three members, who shall
be licensed physicians in good professional standing and peculiarly qualified in the diagnosis or
treatment of occupational diseases. They shall be appointed by the Industrial Commission with
the approval of the Governor, and one of them shall be designated as chairman of the committee
by the Industrial Commission. The members of committee shall be appointed to serve terms as
follows: one for a term of two years, one for a term of four years, and one for a term of six years.
Upon the expiration of each term as above mentioned the Industrial Commission shall appoint a
successor for a term of six years. The function of the committee shall be to conduct examinations
and make reports as required by G.S. 97-61.1 through 97-61.6 and 97-68 through 97-71, and to
assist in any postmortem examinations provided for in G.S. 97-67 when so directed by the
Industrial Commission. Members of the committee shall devote to the duties of the office so
much of their time as may be required in the conducting of examinations with reasonable
promptness, and they shall attend hearings as scheduled by the Industrial Commission when their
attendance is desired for the purpose of examining and cross-examining them respecting any
report or reports made by them.
(b)
Repealed by Session Laws 2003-284, s. 10.33(c), effective July 1, 2003.
(c)
Notwithstanding any other provision of this Article, the Industrial Commission, in its
discretion, may designate a qualified physician who is not a member of the advisory medical
committee to perform an examination of an employee who has filed a claim for benefits for
asbestosis or silicosis. This physician shall file his reports in the same manner a member of the
advisory medical committee files reports; and these reports shall be deemed reports of the
advisory medical committee. (1935, c. 123; 1955, c. 525, s. 7; 1981, c. 562, s. 2; 1989, c. 439;
1991, c. 481, s. 1; 1997-443, s. 11A.38; 1997-508, s. 1; 2003-284, s. 10.33(c).)
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§ 97-73. Fees.
(a)
Claims. – Except as provided in subsection (e) of this section, the Industrial
Commission may establish by rule a schedule of fees for examinations conducted, reports made,
documents filed, and agreements reviewed under this Article. The fees shall be collected in
accordance with rules adopted by the Industrial Commission.
(b),
(c) Repealed by Session Laws 2003-284, s. 10.33(d), effective July 1, 2003.
(d)
Safety. – A fee in the amount set by the Industrial Commission is imposed on an
employer for whom the Industrial Commission provides an educational training program on how
to prevent or reduce accidents or injuries that result in workers' compensation claims or a person
for whom the Industrial Commission provides other educational services. The fees are
departmental receipts.
(e)
Exceptions. – Notwithstanding subsection (a) of this section, the Industrial
Commission may not charge fees for any of the following:
(1)
A hearing before a Deputy Commissioner under this Chapter.
(2)
A hearing before the full Commission under this Chapter.
(3)
Processing of an agreement for compensation of disability, an employer's
admission of employee's right to permanent partial disability, or a
supplemental agreement as to payment of compensation. (1935, c. 123; 1955,
c. 525, s. 8; 1991, c. 481, s. 2; 1991 (Reg. Sess., 1992), c. 1039, s. 2;
1997-443, s. 11A.39; 2003-284, s. 10.33(d); 2005-276, s. 45.1(a); 2009-451, s.
14.16(a); 2014-100, s. 15.16B(a).)
§ 97-74. Expense of hearings taxed as costs in compensation cases; fees collected directed
to general fund.
In hearings arising out of claims for disability and/or death resulting from occupational
diseases the Industrial Commission shall tax as a part of the costs in cases in which
compensation is awarded a reasonable allowance for the services of members of the advisory
medical committee attending such hearings and reasonable allowances for the services of
members of the advisory medical committee for making investigations in connection with all
claims for compensation on account of occupational diseases, including uncontested cases, as
well as contested cases, and whether or not hearings shall have been conducted in connection
therewith. All such charges, fees and allowances to be collected by the Industrial Commission
shall be paid into the general fund of the State treasury to constitute a fund out of which to pay
the expenses of the advisory medical committee. (1935, c. 123.)
§§ 97-75, 97-76: Repealed by Session Laws 2003-284, s. 10.33(f), effective July 1, 2003.
§ 97-77. North Carolina Industrial Commission created; members appointed by Governor;
terms of office; chairman.
(a)
There is hereby created a commission to be known as the North Carolina Industrial
Commission, consisting of six commissioners who shall devote their entire time to the duties of
the Commission. The Governor shall appoint the members of the Commission for terms of six
years. Three commissioners shall be persons who, on account of their previous vocations,
employment or affiliations, can be classed as representatives of employers. Three commissioners
shall be persons who, on account of their previous vocations, employment or affiliations, can be
classed as representatives of employees. No person may serve more than two terms on the
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Commission, including any term served prior to the effective date of this section. In calculating
the number of terms served, a partial term that is less than three years in length shall not be
included.
(a1) Appointments of commissioners are subject to confirmation by the General Assembly
by joint resolution. The names of commissioners to be appointed by the Governor shall be
submitted by the Governor to the General Assembly for confirmation by the General Assembly
on or before March 1 of the year of expiration of the term. If the Governor fails to timely submit
nominations, the General Assembly shall appoint to fill the succeeding term upon the joint
recommendation of the President Pro Tempore of the Senate and the Speaker of the House of
Representatives in accordance with G.S. 120-121 not inconsistent with this section.
In case of death, incapacity, resignation, or any other vacancy in the office of any
commissioner prior to the expiration of the term of office, a nomination to fill the vacancy for the
remainder of the unexpired term shall be submitted by the Governor within four weeks after the
vacancy arises to the General Assembly for confirmation by the General Assembly. If the
Governor fails to timely nominate a person to fill the vacancy, the General Assembly shall
appoint a person to fill the remainder of the unexpired term upon the joint recommendation of
the President Pro Tempore of the Senate and the Speaker of the House of Representatives in
accordance with G.S. 120-121 not inconsistent with this section. If a vacancy arises or exists
pursuant to this subsection when the General Assembly is not in session, and the appointment is
deemed urgent by the Governor, the commissioner may be appointed and serve on an interim
basis pending confirmation by the General Assembly. For the purpose of this subsection, the
General Assembly is not in session only (i) prior to convening of the Regular Session, (ii) during
any adjournment of the Regular Session for more than 10 days, and (iii) after sine die
adjournment of the Regular Session.
No person while in office as a commissioner may be nominated or appointed on an interim
basis to fill the remainder of an unexpired term, or to a full term that commences prior to the
expiration of the term that the commissioner is serving.
(b)
One member, to be designated by the Governor, shall act as chairman. The chairman
shall be the chief judicial officer and the chief executive officer of the Industrial Commission;
such authority shall be exercised pursuant to the provisions of Chapter 126 of the General
Statutes and the rules and policies of the State Human Resources Commission. Notwithstanding
the provisions of this Chapter, the chairman shall have such authority as is necessary to direct
and oversee the Commission. The chairman may delegate any duties and responsibilities as may
be necessary to ensure the proper management of the Industrial Commission. Notwithstanding
the provisions of this Chapter, Chapter 143A, and Chapter 143B of the General Statutes, the
chairman may hire or fire personnel and transfer personnel within the Industrial Commission.
The Governor may designate one vice-chairman from the remaining commissioners. The
vice-chairman shall assume the powers of the chairman upon request of the chairman or when
the chairman is absent for 24 hours or more. The authority delegated to the vice-chairman shall
be relinquished immediately upon the return of the chairman or at the request of the chairman.
(1929, c. 120, s. 51; 1931, c. 274, s. 8; 1991, c. 264, s. 1; 1993, c. 399, s. 3; 1993 (Reg. Sess.,
1994), c. 769, s. 28.15(a); 2011-287, ss. 16, 17; 2013-382, s. 9.1(c).)
§ 97-77.1. Expired.
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63
§ 97-78. Salaries and expenses; administrator, executive secretary, deputy commissioners,
and other staff assistance; annual report.
(a)
The salary of each commissioner shall be the same as that fixed from time to time for
district attorneys except that the commissioner designated as chair shall receive one thousand
five hundred dollars ($1,500) additional per annum.
(b)
The Commission may appoint an administrator whose duties shall be prescribed by
the Commission. The Commission may appoint an executive secretary whose duties shall be
prescribed by the Commission, and who, upon entering upon his duties, shall give bond in such
sum as may be fixed by the Commission. The Commission may also employ such clerical or
other assistance as it may deem necessary, and fix the compensation of its staff, except that the
salaries of the administrator and the executive secretary shall be fixed by subsection (b1) of this
section. The compensation of Commission staff shall be in keeping with the compensation paid
to the persons employed to do similar work in other State departments.
(b1) The salary of the administrator shall be ninety percent (90%) of the salary of a
commissioner. The salary of the executive secretary shall be ninety percent (90%) of the salary
of a commissioner.
(b2) The Chairman of the Industrial Commission shall designate one deputy commissioner
as chief deputy commissioner. The salary of the chief deputy commissioner shall be ninety
percent (90%) of the salary of a commissioner.
(b3) The salary of deputy commissioners shall be based upon years of experience as a
deputy commissioner as follows:
(1)
Seventy-five percent (75%) of the salary of a commissioner, with three years
of experience or less.
(2)
Seventy-seven percent (77%) of the salary of a commissioner, with more than
three but less than seven years of experience.
(3)
Eighty percent (80%) of the salary of a commissioner, with seven or more but
less than 10 years of experience.
(4)
Eighty-three percent (83%) of the salary of a commissioner, with 10 or more
but less than 12 years of experience.
(5)
Eighty-five percent (85%) of the salary of a commissioner, with 12 or more
years experience.
(b4) In lieu of merit and other incremental raises, the administrator, executive secretary,
chief deputy commissioner, and deputy commissioners shall receive longevity pay on the same
basis as is provided to other employees subject to the North Carolina Human Resources Act.
(c)
The members of the Commission and its assistants shall be entitled to receive from
the State their actual and necessary expenses while traveling on the business of the Commission,
but such expenses shall be certified by the person who incurred the same, and shall be approved
by the chairman of the Commission before payment is made.
(d)
All salaries and expenses of the Commission shall be audited and paid out of the State
treasury, in the manner prescribed for similar expenses in other departments or branches of the
State service, and to defray such salaries and expenses a sufficient appropriation shall be made
under the General Appropriation Act as made to other departments, commissions and agencies of
the State government.
(e)
No later than October 1 of each year, the Commission shall publish annually for free
distribution a report of the administration of this Article, together with such recommendations as
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the Commission deems advisable. No later than October 1 of each year, the Commission shall
submit this report to the Joint Legislative Commission on Governmental Operations.
(f)
No later than April 1, 2008, the Commission shall prepare and implement a strategic
plan for accomplishing all of the following:
(1)
Tracking compliance with the provisions of G.S. 97-18(b), (c), and (d), and
establishing a procedure to enforce compliance with the requirements of these
subsections.
(2)
Expeditiously resolving requests for, or disputes involving, medical
compensation under G.S. 97-25, including selection of a physician, change of
physician, the specific treatment involved, and the provider of such treatment.
(g)
The Commission shall demonstrate its success in implementing its strategic plan
under subsection (f) of this section by including all of the following in its annual report under
subsection (e) of this section:
(1)
The total number of claims made during the preceding calendar year, the total
number of claims in which compliance was not timely made, and, for each
claim, the date the claim was filed, the date by which compliance was
required, the date of actual compliance, and any sanctions or other remedial
action imposed by the Commission.
(2)
The total number of requests for, and disputes involving, medical
compensation under G.S. 97-25 in which final disposition was not made
within 75 days of the filing of the motion with the Commission, and, for each
such request or dispute, the date the motion or other initial pleading was filed,
the date on which final disposition was made and, where reasonably
ascertainable, the date on which any ordered medical treatment was actually
provided. (1929, c. 120, s. 52; 1931, c. 274, s. 9; 1941, c. 358, s. 2; 1947, c.
823; 1957, c. 541, s. 6; 1971, c. 527, s. 1; c. 1147, s. 1; 1983, c. 717, s. 20;
1983 (Reg. Sess., 1984), c. 1034, s. 164; 1997-443, s. 33.4; 1998-212, s.
28.18(a); 2005-276, s. 29.20(b); 2007-323, ss. 13.4A(a), (b); 2013-382, s.
9.1(c); 2013-413, s. 60(a); 2014-77, s. 5; 2014-115, ss. 17, 55.4(c).)
§ 97-78.1. Standards of judicial conduct to apply to commissioners and deputy
commissioners.
The Code of Judicial Conduct for judges of the General Court of Justice and the procedure
for discipline of judges in Article 30 of Chapter 7A of the General Statutes shall apply to
commissioners and deputy commissioners. Commissioners and deputy commissioners shall be
liable for impeachment for the causes and in the manner provided for judges of the General
Court of Justice in Chapter 123 of the General Statutes. (2011-287, s. 18.)
§ 97-79. Offices and supplies; deputies with power to subpoena witnesses and to take
testimony; meetings; hearings.
(a)
The Commission shall be provided with adequate offices in which the records shall
be kept and its official business transacted during regular business hours; it shall also be
provided with necessary office furniture, stationery, and other supplies.
(b)
The Chair of the Commission may appoint deputy commissioners to serve a term of
six years. No person may serve more than two terms as a deputy commissioner. In calculating
the number of terms served, a partial term of less than two years shall not be included. Deputy
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65
commissioners shall have the same power as members of the Commission pursuant to G.S. 97-80
and the same power to take evidence and enter orders, opinions, and awards based thereon as is
possessed by the members of the Commission. During the term, the deputy commissioner may
only be removed from office pursuant to G.S. 97-78.1. Upon the expiration of each term, the
deputy commissioner's employment shall be separated unless reappointed by the Chair of the
Commission.
(c)
The Commission or any member thereof may hold sessions at any place within the
State as may be deemed necessary by the Commission.
(d)
Hearings before the Commission shall be open to the public and shall be
stenographically reported, and the Commission is authorized to contract for the reporting of such
hearings. The Commission shall by regulation provide for the preparation of a record of the
hearings and other proceedings. Notwithstanding the provisions of this subsection, informal
hearings conducted pursuant to the provisions of G.S. 97-18.1, whether by telephone or in
person, shall not be open to the public nor stenographically reported unless the Commission
orders otherwise.
(e)
The Commission, or any member thereof, or any deputy is authorized by appropriate
order, to make additional parties plaintiff or defendant in any proceeding pending before the
Commission when it is made to appear that such new party is either a necessary party or a proper
party to a final determination of the proceeding.
(f)
The Commission shall create an ombudsman program to assist unrepresented
claimants, employers, and other parties, to enable them to protect their rights under this Article.
In addition to other duties assigned by the Commission, the ombudsman shall meet with, or
otherwise provide information to, injured employees, investigate complaints, and communicate
with employers' insurance carriers and physicians at the request of the claimant. Assistance
provided under this subsection shall not include representing the claimant in a compensation
hearing.
(g)
The Commission shall adopt rules, in accordance with Article 2A of Chapter 150B of
the General Statutes, for administrative motions, including practices and procedures for carrying
out the provisions of this Article. (1929, c. 120, s. 53; 1931, c. 274, s. 10; 1951, c. 1059, s. 7;
1955, c. 1026, s. 11; 1971, c. 527, s. 2; c. 1147, s. 2; 1981 (Reg. Sess., 1982), c. 1243, s. 1; 1993
(Reg. Sess., 1994), c. 679, s. 5.2; 2013-294, s. 5; 2013-413, s. 60(b); 2014-100, ss. 15.16(a), (d);
2014-115, s. 17.)
§ 97-80. Rules and regulations; subpoena of witnesses; examination of books and records;
depositions; costs.
(a)
The Commission shall adopt rules, in accordance with Article 2A of Chapter 150B of
the General Statutes and not inconsistent with this Article, for carrying out the provisions of this
Article.
The Commission shall adopt rules establishing processes and procedure to be used under this
Article.
Processes, procedure, and discovery under this Article shall be as summary and simple as
reasonably may be.
(b)
The Commission or any member thereof, or any person deputized by it, shall have the
power, for the purpose of this Article, to tax costs against the parties, to administer or cause to
have administered oaths, to preserve order at hearings, to compel the attendance and testimony of
witnesses, and to compel the production of books, papers, records, and other tangible things.
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66
(c)
The Commission may order parties to participate in mediation, under rules
substantially similar to those approved by the Supreme Court for use in the Superior Court
division, except the Commission shall determine the manner in which payment of the costs of the
mediated settlement conference is assessed.
(d)
The Commission may order testimony to be taken by deposition and any party to a
proceeding under this Article may, upon application to the Commission, which application shall
set forth the materiality of the evidence to be given, cause the depositions of witnesses residing
within or without the State to be taken, the costs to be taxed as other costs by Commission.
Depositions ordered by the Commission upon application of a party shall be taken after giving
the notice and in the manner prescribed by law for depositions in action at law, except that they
shall be directed to the Commission, the commissioner, or the deputy commissioner before
whom the proceedings may be pending.
(e)
A subpoena may be issued by the Commission and served in accordance with
G.S. 1A-1, Rule 45. A party shall not issue a subpoena duces tecum less than 30 days prior to the
hearing date except upon prior approval of the Commission. Upon a motion, the Commission
may quash a subpoena if it finds that the evidence the production of which is required does not
relate to a matter in issue, the subpoena does not describe with sufficient particularity the
evidence the production of which is required, or for any other reason sufficient in law the
subpoena may be quashed. Each witness who appears in obedience to such subpoena of the
Commission shall receive for attendance the fees and mileage for witnesses in civil cases in
courts of the county where the hearing is held.
(f)
The Commission may by rule provide for and limit the use of interrogatories and
other forms of discovery, including production of books, papers, records, and other tangible
things, and it may provide reasonable sanctions for failure to comply with a Commission order
compelling discovery.
(g)
The Commission or any member or deputy thereof shall have the same power as a
judicial officer pursuant to Chapter 5A of the General Statutes to hold a person in civil contempt,
as provided thereunder, for failure to comply with an order of the Commission, Commission
member, or deputy. A person held in civil contempt may appeal in the manner provided for
appeals pursuant to G.S. 97-85 and G.S. 97-86. The provisions of G.S. 5A-24 shall not apply to
appeals pursuant to this subsection.
(h)
The Commission or any member or deputy thereof shall also have the same power as
a judicial officer pursuant to Chapter 5A of the General Statutes to punish for criminal contempt,
subject to the limitations thereunder, (i) for willful behavior committed during the sitting of the
commissioner or deputy commissioner and directly tending to interrupt the proceedings; (ii) for
willful disobedience of a lawful order of the Commission or a member or deputy thereof; or (iii)
for willful refusal to be sworn or affirmed as a witness, or, when so sworn or affirmed, willful
refusal to answer any legal and proper question when refusal is not legally justified. The
Commission or any member or deputy thereof may issue an order of arrest as provided by
G.S. 15A-305 when authorized by G.S. 5A-16 in connection with contempt proceedings. When
the commissioner or deputy commissioner chooses not to proceed summarily pursuant to
G.S. 5A-14, the proceedings shall be before a district court judge, and venue lies throughout the
district where the order was issued directing the person charged to appear. To initiate plenary
proceedings in district court for indirect criminal contempt, the Commission shall issue and file
with the clerk of court an order to appear and show cause pursuant to G.S. 5A-15(a) and, if
appropriate, an order for arrest pursuant to G.S. 5A-16(b) and G.S. 15A-305. A person found in
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67
criminal contempt may appeal in the manner provided for appeals in criminal actions to the
superior court of the district in which the order of contempt was issued, and the appeal is by
hearing de novo before a superior court judge. (1929, c. 120, s. 54; 1977, cc. 456, 505; 1981
(Reg. Sess., 1982), c. 1243, s. 2; 1993, c. 321, s. 25(b); c. 399, s. 1; 1993 (Reg. Sess., 1994), c.
679, ss. 5.3, 5.4; 1995, c. 358, s. 8(a), (b); c. 437, s. 6(a), (b); c. 467, s. 5(a), (b); c. 507, ss. 25.13,
27.8(o); c. 509, s. 48; 2000-140, s. 93.1(a); 2001-424, s. 12.2(b); 2011-287, s. 19; 2013-294, s. 6;
2016-100, s. 10.)
§ 97-81. Blank forms and literature; statistics; safety provisions; accident reports; studies
and investigations and recommendations to General Assembly; to cooperate
with other agencies for prevention of injury.
(a)
The Commission shall prepare and cause to be printed, and upon request furnish, free
of charge to any employee or employer, such blank forms and literature as it shall deem requisite
to facilitate or prompt the efficient administration of this Article. Notwithstanding G.S.
150B-2(8a)d., any new forms or substantive amendments to old forms adopted after July 1, 2013,
shall be adopted in accordance with Article 2A of Chapter 150B of the General Statutes. The
Commission may authorize the use of electronic submission of forms and other means of
transmittal of forms and notices when it deems appropriate.
(b)
The Commission shall tabulate the accident reports received from employers in
accordance with G.S. 97-92 and shall publish the same in the annual report of the Commission
and as often as it may deem advisable, in such detailed or aggregate form as it may deem best.
The name of the employer or employee shall not appear in such publications, and the employers'
reports shall be private records of the Commission, and shall not be open for public inspection
except for the inspection of the parties directly involved, and only to the extent of such interest,
and except for inspection by the Department of Labor and other State or federal agencies
pursuant to subsections (d) and (e) of this section. These reports shall not be used as evidence
against any employer in any suit at law brought by any employee for the recovery of damages.
(c)
The Commission shall make studies and investigations with respect to safety
provisions and the causes of injuries in employments covered by this Article, and shall from time
to time make to the General Assembly and to employers and carriers such recommendations as it
may deem proper as to the best means of preventing such injuries.
(d)
In making such studies and investigations the Commission shall:
(1)
Cooperate with any agency of the United States charged with the duty of
enforcing any law securing safety against injury in any employment covered
by this Article, or with any State agency engaged in enforcing any laws to
assure safety for employees, and
(2)
Permit any such agency to have access to the records of the Commission.
In carrying out the provisions of this section the Commission or any officer or employee of
the Commission is authorized to enter at any reasonable time upon any premises, tracks, wharf,
dock, or other landing place, or to enter any building, where an employment covered by this
Article is being carried on, and to examine any tool, appliance, or machinery used in such
employment.
(e)
The Commission shall, upon written request from the Commissioner of Labor,
provide from the Commission's records the following information from claims filed by
employees, and from employer reports of injury to an employee required by G.S. 97-92:
(1)
Name and business address of the employer;
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(2)
(3)
(4)
(5)
Type of business of the employer;
Date the accident, illness, or injury occurred;
Nature of the injury or disease reported; and
Whether compensation for disability or medical expenses was paid to the
injured employee.
Information provided to the Commissioner of Labor pursuant to this subsection, and to other
State and federal agencies pursuant to subsection (d) of this section, shall be private and exempt
from public inspection to the same extent that records of the Commission are so exempt. (1929,
c. 120, s. 55; 1991 (Reg. Sess., 1992), c. 894, s. 2; 1993 (Reg. Sess., 1994), c. 679, s. 10.2;
2013-294, s. 7.)
§ 97-82. Memorandum of agreement between employer and employee to be submitted to
Commission on prescribed forms for approval; direct payment as award.
(a)
If the employer and the injured employee or his dependents reach an agreement in
regard to compensation under this Article, they may enter into a memorandum of the agreement
in the form prescribed by the Commission.
An agreement, however, shall be incorporated into a memorandum of agreement in regard to
compensation: (i) for loss or permanent injury, disfigurement, or permanent and total disability
under G.S. 97-31, (ii) for death from a compensable injury or occupational disease under G.S.
97-38, or (iii) when compensation under this Article is paid or payable to an employee who is
incompetent or under 18 years of age.
The memorandum of agreement, accompanied by the material medical and vocational
records, shall be filed with and approved by the Commission; otherwise such agreement shall be
voidable by the employee or his dependents.
(b)
If approved by the Commission, a memorandum of agreement shall for all purposes
be enforceable by the court's decree as hereinafter specified. Payment pursuant to G.S. 97-18(b),
or payment pursuant to G.S. 97-18(d) when compensability and liability are not contested prior
to expiration of the period for payment without prejudice, shall constitute an award of the
Commission on the question of compensability of and the insurer's liability for the injury for
which payment was made. Compensation paid in these circumstances shall constitute payment of
compensation pursuant to an award under this Article. (1929, c. 120, s. 56; 1993 (Reg. Sess.,
1994), c. 679, s. 3.2; 2005-448, s. 7.)
§ 97-83. Commission is to make award after hearing.
If the employer and the injured employee or his dependents fail to reach an agreement in
regard to benefits under this Article within 14 days after the employer has written or actual
notice of the injury or death, or upon the arising of a dispute under this Article, either party may
make application to the Commission for a hearing in regard to the matters at issue, and for a
ruling thereon.
Immediately after such application has been received the Commission shall set the date of a
hearing, which shall be held as soon as practicable and shall notify the parties at issue of the time
and place of such hearing. The hearing or hearings shall be held in the city or county where the
injury occurred, unless otherwise authorized by the Commission. (1929, c. 120, s. 57; 1955, c.
1026, s. 121/2; 1977, c. 743; 1993 (Reg. Sess., 1994), c. 679, s. 3.3.)
§ 97-83.1. Facilities for hearings; security.
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The senior resident superior court judge shall provide suitable facilities for the conduct of
hearings under this Article in the county or counties within the judge's district at the time the
Commission schedules hearings therein. The senior resident superior court judge shall, to the
extent the judge determines necessary and practicable, provide or arrange for security at
Commission hearings upon the request of a member or deputy of the Commission. (1993 (Reg.
Sess., 1994), c. 679, s. 5.7.)
§ 97-84. Determination of disputes by Commission or deputy.
The Commission or any of its members shall hear the parties at issue and their
representatives and witnesses, and shall determine the dispute in a summary manner. The
Commission shall decide the case and issue findings of fact based upon the preponderance of the
evidence in view of the entire record. The award, together with a statement of the findings of
fact, rulings of law, and other matters pertinent to the questions at issue shall be filed with the
record of the proceedings, within 180 days of the close of the hearing record unless time is
extended for good cause by the Commission, and a copy of the award shall immediately be sent
to the parties in dispute. The parties may be heard by a deputy, in which event the hearing shall
be conducted in the same way and manner prescribed for hearings which are conducted by a
member of the Industrial Commission, and said deputy shall proceed to a complete determination
of the matters in dispute, file his written opinion within 180 days of the close of the hearing
record unless time is extended for good cause by the Commission, and the deputy shall cause to
be issued an award pursuant to such determination. (1929, c. 120, s. 58; 1951, c. 1059, s. 7;
1987, c. 729, s. 15; 2011-287, s. 20.)
§ 97-85. Review of award.
(a)
If application is made to the Commission within 15 days from the date when notice of
the award shall have been given, the full Commission shall review the award, and, if good
ground be shown therefor, reconsider the evidence, receive further evidence, rehear the parties or
their representatives, and, if proper, amend the award: Provided, however, when application is
made for review of an award, and such an award has been heard and determined by a
commissioner of the North Carolina Industrial Commission, the commissioner who heard and
determined the dispute in the first instance, as specified by G.S. 97-84, shall be disqualified from
sitting with the full Commission on the review of such award, and the chairman of the Industrial
Commission shall designate a deputy commissioner to take such commissioner's place in the
review of the particular award. The deputy commissioner so designated, along with the two other
commissioners, shall compose the full Commission upon review. Provided further, the chairman
of the Industrial Commission shall have the authority to designate a deputy commissioner to take
the place of a commissioner on the review of any case, in which event the deputy commissioner
so designated shall have the same authority and duty as does the commissioner whose place he
occupies on such review.
(b)
Unless waived by consent of the parties, all hearings of the full Commission shall be
recorded. Court reporters, transcription personnel, or electronic or other mechanical devices may
be utilized. If an electronic or other mechanical device is utilized, it shall be the duty of some
person designated by the Commission to operate the device while a hearing is in progress, and
the recording shall be preserved and may be transcribed, as required. If stenotype, shorthand, or
stenomask equipment is used, the original tapes, notes, discs, or other records are the property of
the State and the Commission shall keep them in its custody. The compensation and allowances
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of reporters shall be fixed by the Commission in a manner that is consistent with policies set by
the Administrative Office of the Courts for the General Court of Justice. (1929, c. 120, s. 59;
1963, c. 402; 1977, cc. 390, 431; 2013-163, s. 1.)
§ 97-86. Award conclusive as to facts; appeal; certified questions of law.
The award of the Industrial Commission, as provided in G.S. 97-84, if not reviewed in due
time, or an award of the Commission upon such review, as provided in G.S. 97-85, shall be
conclusive and binding as to all questions of fact; but either party to the dispute may, within 30
days from the date of such award or within 30 days after receipt of notice to be sent by registered
mail or certified mail of such award, but not thereafter, appeal from the decision of said
Commission to the Court of Appeals for errors of law under the same terms and conditions as
govern appeals from the superior court to the Court of Appeals in ordinary civil actions. The
procedure for the appeal shall be as provided by the rules of appellate procedure.
The Industrial Commission of its own motion may certify questions of law to the Court of
Appeals for decision and determination by said Court. In case of an appeal from the decision of
the Commission, or of a certification by said Commission of questions of law, to the Court of
Appeals, said appeal or certification shall operate on a supersedeas except as provided in G.S.
97-86.1, and no employer shall be required to make payment of the award involved in said
appeal or certification until the questions at issue therein shall have been fully determined in
accordance with the provisions of this Article. If the employer is a noninsurer, then the appeal of
such employer shall not act as a supersedeas and the plaintiff in such case shall have the same
right to issue execution or to satisfy the award from the property of the employer pending the
appeal as obtains to the successful party in an action in the superior court.
When any party to an appeal from an award of the Commission is unable, by reason of his
poverty, to make the deposit or to give the security required by law for said appeal, any member
of the Commission or any deputy commissioner shall enter an order allowing said party to appeal
from the award of the Commission without giving security therefor. The party appealing from
the judgment shall, within 30 days from the filing of the appeal from the award, make an
affidavit that he is unable by reason of his poverty to give the security required by law. The
request shall be passed upon and granted or denied by a member of the Commission or deputy
commissioner within 20 days from receipt of the affidavit specified above. (1929, c. 120, s. 60;
1947, c. 823; 1957, c. 1396, s. 9; 1959, c. 863, s. 4; 1967, c. 669; 1971, c. 1189; 1975, c. 391, s.
15; 1977, c. 521, s. 1; 1993 (Reg. Sess., 1994), c. 679, s. 10.5; 1995 (Reg. Sess., 1996), c. 552, s.
1.)
§ 97-86.1. Payment of award pending appeal in certain cases.
(a)
When any appeal or certification to the Court of Appeals is pending, and it appears to
the Commission that any part of the award appealed from is not appealed by the issues raised by
such appeal, the Commission may, on action or of its own motion, render a judgment directing
compliance with any portion of such award not affected by such appeal; or, if the only issue
raised by such appeal is the amount of the average weekly wage, the Commission shall, on
motion of the claimant, direct the payment of such portion of the compensation payable under its
award as is not in dispute, if any, pending final adjudication of the undisputed portion thereof.
(b)
In any claim under the provisions of this Chapter where it is conceded by all parties
that the employee's claim is a compensable one and the amount is not disputed and where the
only issue is which employer or employers, carrier or carriers are liable, the Commission may,
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where an appeal from a hearing commissioner or the full Commission is taken by one or more
parties, order payment made to the employee pending outcome of the case on appeal. The order
of payment shall contain the provision that if the employer or carrier ordered to pay is not
ultimately liable for the amount paid, the employer or carrier will be reimbursed by the employer
or carrier ultimately held liable.
(c)
No payment made pursuant to the provisions of this section shall in any manner
operate as an admission of liability or estoppel to deny liability by an employer or carrier.
(d)
In any claim under the provisions of this Chapter wherein one employer or carrier has
made payments to the employee or his dependents pending a final disposition of the claim and it
is determined that different or additional employers or carriers are liable, the Commission may
order any employers or carriers determined liable to make repayment in full or in part to any
employer or carrier which has made payments to the employee or his dependents. (1977, c. 521,
s. 2.)
§ 97-86.2. Interest on awards after hearing.
In any workers' compensation case in which an order is issued either granting or denying an
award to the employee and where there is an appeal resulting in an ultimate award to the
employee, the insurance carrier or employer shall pay interest on the final award or unpaid
portion thereof from the date of the initial hearing on the claim, until paid at the legal rate of
interest provided in G.S. 24-1. If interest is paid it shall not be a part of, or in any way increase
attorneys' fees, but shall be paid in full to the claimant. (1981, c. 242, s. 1; 1985, c. 598; 1987, c.
729, s. 16.)
§ 97-87. Judgments on awards.
(a)
As used in this section, "award" includes the following:
(1)
A form filed, or an award arising, under G.S. 97-18(b), 97-18(d), or 97-82(b).
(2)
A memorandum of agreement approved by the Commission.
(3)
An order or decision of the Commission.
(4)
An award of the Commission from which there has been no appeal.
(5)
An award of the Commission affirmed on appeal.
(b)
When an award or portion of an award provides for a sum certain or for a sum that
can by computation be made certain, and that sum is due and payable as of the date of the award,
a judgment may be docketed as provided in subsection (d) of this section, in an amount equal to
that sum.
(c)
When an award or portion of an award provides for periodic payments to be made on
or after the date of the award, a judgment may be docketed as provided in subsection (d) of this
section, in an amount equal to the sum stated in any Certificate of Accrued Arrearages that is
issued by the Commission under this subsection. If any payment that has accrued after the date
of the award, or after the date specified in the most recent Certificate of Accrued Arrearages
issued under this subsection, is not received by the claimant when due, the following procedure
is available for obtaining a Certificate of Accrued Arrearages:
(1)
The claimant may file with the Commission a Statement of Accrued
Arrearages, on a form approved by the Commission, and shall serve a copy on
all parties against whom judgment is sought and their attorney of record.
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(2)
Any party against whom judgment is sought may, within 15 days of the date
of service of a Statement of Accrued Arrearages, file with the Commission
proof of any payments that have been made or other responsive pleadings.
(3)
If no proof or other responsive pleading is filed within 15 days of the date of
service of the Statement, the Commission shall immediately issue a Certificate
of Accrued Arrearages.
(4)
If proof of payment or other responsive pleading is filed, the Commission
shall, within seven days, either issue a Certificate of Accrued Arrearages that
shall state the sum of payments due or decline to issue a Certificate of
Accrued Arrearages. The Commission shall notify the claimant, the party
against whom judgment is sought, and their attorney of record of the
Commission's decision.
(5)
If any party disputes the decision of the Commission entered under
subdivision (c)(4) of this section, the party may appeal to the full Commission
within 10 days of the entry of the decision of the Commission. The
nonappealing party may file a response within 10 days of receiving notice of
appeal. The notice of appeal shall request one of the following:
a.
The Commission reconsider the decision entered based on the record
and any additional evidence that parties submit with the notice and
response.
b.
A de novo evidentiary hearing before the full Commission.
(6)
The Commission shall grant the request for an evidentiary hearing under
sub-subdivision (c)(5)b. of this section if a material issue of fact exists whose
resolution is necessary to determine the appeal.
(7)
If a notice of appeal is given under sub-subdivision (c)(5)a. of this section, the
Commission shall issue its decision within 10 days of the filing of the
response under subdivision (c)(5)b. of this section. If a notice of appeal is
given under sub-subdivision (c)(5) of this section, the Commission shall either
conduct an evidentiary hearing and issue its decision on the appeal within 90
days of the filing of the response under subdivision (c)(5) of this section or
deny the request for the evidentiary hearing and issue its decision within 10
days of the filing of the response under subdivision (c)(5) of this section.
Further appeals are governed by G.S. 97-86.
(8)
Each award and each Certificate of Accrued Arrearages shall include the
following information:
a.
The names and addresses of the parties.
b.
The sum of all principal amounts that have accrued and remain unpaid
since the date of the award or since the date of the most recent prior
Certificate of Accrued Arrearages.
c.
The total of any interest that has accrued on the award, as of the date
of the Certificate of Accrued Arrearages, since the date of the award or
since the date of the most recent prior Certificate of Accrued
Arrearages.
d.
Any costs, penalties, or monetary sanctions included in the award.
(d)
Any party in interest may file a certified copy of an award described in subsection (b)
of this section, or of a Certificate of Accrued Arrearages, in the office of the clerk of superior
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court of the county in which the defendant has a place of business or has property, or in which an
injury occurred, or in Wake County. An award shall be accompanied by the party's affidavit
stating that the award has become final and the time for making the first payment under the
award has expired.
(e)
Promptly after a certified copy of an award or of a Certificate of Accrued Arrearages
is filed, the clerk shall docket and index a judgment as provided in Chapter 1 of the General
Statutes. The principal amount in the award or in the Certificate of Accrued Arrearages shall bear
interest at the judgment rate from the date the judgment is docketed. The judgment may be
enforced in the same manner as a judgment docketed under Chapter 1 of the General Statutes.
(f)
The filing of an award, or of a Certificate of Accrued Arrearages, for docketing as a
judgment under this section shall be treated as a civil action for record-keeping purposes. The
amount in which the judgment is docketed shall determine the amount of the costs to be collected
at the time of filing and assessed pursuant to G.S. 7A-305.
(g)
Nothing in this section shall be construed to limit the Commission's authority to
impose any other remedy provided by law. (1929, c. 120, s. 61; 2001-477, s. 1.)
§ 97-88. Expenses of appeals brought by insurers.
If the Industrial Commission at a hearing on review or any court before which any
proceedings are brought on appeal under this Article, shall find that such hearing or proceedings
were brought by the insurer and the Commission or court by its decision orders the insurer to
make, or to continue payments of benefits, including compensation for medical expenses, to the
injured employee, the Commission or court may further order that the cost to the injured
employee of such hearing or proceedings including therein reasonable attorney's fee to be
determined by the Commission shall be paid by the insurer as a part of the bill of costs. (1929, c.
120, s. 62; 1931, c. 274, s. 11; 1971, c. 500.)
§ 97-88.1. Attorney's fees at original hearing.
If the Industrial Commission shall determine that any hearing has been brought, prosecuted,
or defended without reasonable ground, it may assess the whole cost of the proceedings
including reasonable fees for defendant's attorney or plaintiff's attorney upon the party who has
brought or defended them. (1979, c. 268, s. 1.)
§ 97-88.2. Penalty for fraud.
(a)
Any person who willfully makes a false statement or representation of a material fact
for the purpose of obtaining or denying any benefit or payment, or assisting another to obtain or
deny any benefit or payment under this Article, shall be guilty of a Class 1 misdemeanor if the
amount at issue is less than one thousand dollars ($1,000). Violation of this section is a Class H
felony if the amount at issue is one thousand dollars ($1,000) or more. The court may order
restitution.
(a1) When a person is convicted under subsection (a) of this section, the Commission may
enter such orders as necessary to ensure that the person convicted does not benefit from the
unlawful conduct.
(b)
The Commission shall:
(1)
Perform investigations regarding all cases of suspected fraud and all violations
related to workers' compensation claims, by or against insurers or self-funded
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employers, and refer possible criminal violations to the appropriate
prosecutorial authorities;
(2)
Conduct administrative violation proceedings; and
(3)
Assess and collect civil penalties and restitution.
The Commission may employ sworn law enforcement officers duly appointed and certified
through the North Carolina Criminal Justice Education and Training Standards Commission to
conduct the investigations mandated by this subsection.
(c)
Any person who threatens an employee with criminal prosecution under the
provisions of subsection (a) of this section for the purpose of coercing or attempting to coerce the
employee into agreeing to compensation or agreeing to forgo compensation under this Article
shall be guilty of a Class H felony.
(d)
The Commission shall not be liable in a civil action for any action made in good faith
under this section, including the identification and referral of a person for investigation and
prosecution for an alleged administrative violation or criminal offense. Any person, including,
but not limited to, an attorney, an employee, an employer, an insurer, and an employee of an
insurer, who in good faith comes forward with information under this section, shall not be liable
in a civil action.
(e)
The Commission shall report annually to the General Assembly on the number and
disposition of investigations involving claimants, employers, insurance company officials,
officials of third-party administrators, insurance agents, attorneys, health care providers, and
vocational rehabilitation providers. (1993 (Reg. Sess., 1994), c. 679, s. 7.1; 1995, c. 507, s. 25(a);
1997-353, s. 1; 2005-448, s. 8; 2007-358, s. 1.)
§ 97-88.3. Penalty for health care providers.
(a)
In addition to any liability under G.S. 97-88.2, any health care provider who willfully
or intentionally undertakes the following acts is subject to an administrative penalty, assessed by
the Commission, not to exceed ten thousand dollars ($10,000):
(1)
Submitting charges for health care that was not furnished;
(2)
Fraudulently administering, providing, and attempting to collect for
inappropriate or unnecessary treatment or services; or
(3)
Violating the provisions of Article 28 of Chapter 90 of the General Statutes.
A penalty assessed by the Commission for a violation of subdivision (3) of this subsection is
in addition to penalties assessed under G.S. 90-407.
(b)
In addition to any liability under G.S. 97-88.2, any health care provider who willfully
or intentionally undertakes the following acts is subject to an administrative penalty, assessed by
the Commission, not to exceed one thousand dollars ($1,000):
(1)
Failing or refusing to timely file required reports or records;
(2)
Making unnecessary referrals; and
(3)
Knowingly violating this Article or rules promulgated hereunder, including
treatment guidelines, with intention to deceive or to gain improper advantage
of a patient, employee, insurer, or the Commission.
(c)
A health care provider who knowingly charges or otherwise holds an employee
financially responsible for the cost of any services provided for a compensable injury under this
Article is guilty of a Class 1 misdemeanor.
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75
(d)
Any person, including, but not limited to, an employer, an insurer, and an employee
of an insurer, who in good faith comes forward with information under this section, shall not be
liable in a civil action.
(e)
Information relating to possible violations under this section shall be reported to the
Commission which shall refer the same to the appropriate licensing or regulatory board or
authority for the health care provider involved.
(f)
A hospital that relies in good faith on a written order of a physician in performing
health care services shall not be subject to an administrative penalty in violation of this section.
(1993 (Reg. Sess., 1994), c. 679, s. 7.2.)
§ 97-89. Commission may appoint qualified physician to make necessary examinations;
expenses; fees.
The Commission or any member thereof may, upon the application of either party, or upon
its own motion, appoint a disinterested and duly qualified physician or surgeon to make any
necessary medical examination of the employee, and to testify in respect thereto. Said physician
or surgeon shall be allowed traveling expenses and a reasonable fee to be fixed by the
Commission. The fees and expenses of such physician or surgeon shall be paid by the employer.
(1929, c. 120, s. 63; 1931, c. 274, s. 12; 1973, c. 520, s. 3.)
§ 97-90. Legal and medical fees to be approved by Commission; misdemeanor to receive
fees unapproved by Commission, or to solicit employment in adjusting claims;
agreement for fee or compensation.
(a)
Fees for attorneys and charges of health care providers for medical compensation
under this Article shall be subject to the approval of the Commission; but no physician or
hospital or other medical facilities shall be entitled to collect fees from an employer or insurance
carrier until he has made the reports required by the Commission in connection with the case.
Except as provided in G.S. 97-26(g), a request for a specific prior approval to charge shall be
submitted to the Commission for each such fee or charge.
(b)
Any person (i) who receives any fee, other consideration, or any gratuity on account
of services so rendered, unless such consideration or gratuity is approved by the Commission or
the court, as provided in subsection (c), or (ii) who makes it a business to solicit employment for
a lawyer or for himself in respect of any claim or award for compensation, shall be guilty of a
Class 1 misdemeanor.
(c)
If an attorney has an agreement for fee or compensation under this Article, he shall
file a copy or memorandum thereof with the hearing officer or Commission prior to the
conclusion of the hearing. If the agreement is not considered unreasonable, the hearing officer or
Commission shall approve it at the time of rendering decision. If the agreement is found to be
unreasonable by the hearing officer or Commission, the reasons therefor shall be given and what
is considered to be reasonable fee allowed. If within five days after receipt of notice of such fee
allowance, the attorney shall file notice of appeal to the full Commission, the full Commission
shall hear the matter and determine whether or not the attorney's agreement as to a fee or the fee
allowed is unreasonable. If the full Commission is of the opinion that such agreement or fee
allowance is unreasonable and so finds, then the attorney may, by filing written notice of appeal
within 10 days after receipt of such action by the full Commission, appeal to the senior resident
judge of the superior court in the county in which the cause of action arose or in which the
claimant resides; and upon such appeal said judge shall consider the matter and determine in his
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76
discretion the reasonableness of said agreement or fix the fee and direct an order to the
Commission following his determination therein. The Commission shall, within 20 days after
receipt of notice of appeal from its action concerning said agreement or allowance, transmit its
findings and reasons as to its action concerning such agreement or allowance to the judge of the
superior court designated in the notice of appeal. In all other cases where there is no agreement
for fee or compensation, the attorney or claimant may, by filing written notice of appeal within
five days after receipt of notice of action of the full Commission with respect to attorneys' fees,
appeal to the senior resident judge of the superior court of the district of the county in which the
cause arose or in which the claimant resides; and upon such appeal said judge shall consider the
matter of such fee and determine in his discretion the attorneys' fees to be allowed in the cause.
The Commission shall, within 20 days after notice of appeal has been filed, transmit its findings
and reasons as to its action concerning such fee or compensation to the judge of the superior
court designated in the notice of appeal; provided that the Commission shall in no event have any
jurisdiction over any attorneys' fees in any third-party action. In any case in which an attorney
appeals to the superior court on the question of attorneys' fees, the appealing attorney shall notify
the Commission and the employee of any and all proceedings before the superior court on the
appeal, and either or both may appear and be represented at such proceedings.
The Commission, in determining an allowance of attorneys' fees, shall examine the record to
determine the services rendered. The factors which may be considered by the Commission in
allowing a reasonable fee include, but are not limited to, the time invested, the amount involved,
the results achieved, whether the fee is fixed or contingent, the customary fee for similar
services, the experience and skill level of the attorney, and the nature of the attorney's services.
In making the allowance of attorneys' fees, the Commission shall, upon its own motion or
that of an interested party, set forth findings sufficient to support the amount approved.
The Commission may deny or reduce an attorney's fees upon proof of solicitation of
employment in violation of the Rules of Professional Conduct of the North Carolina State Bar.
(d)
Provided, that nothing contained in this section shall prevent the collection of such
reasonable fees of physicians and charges for hospitalization as may be recovered in an action, or
embraced in settlement of a claim, against a third-party tort-feasor as described in G.S. 97-10.2.
(e)
A health care provider shall not pursue a private claim against an employee for all or
part of the costs of medical treatment provided to the employee by the provider unless the
employee's claim or the treatment is finally adjudicated not to be compensable or the employee
fails to request a hearing after denial of liability by the employer. Notwithstanding subsequent
denial of liability or adjudication that the condition treated was not compensable, the insurer
shall be liable as provided in G.S. 97-26 to providers whose services have been authorized by the
insurer or employer. The statute of limitations applicable to a provider's claim for payment shall
be tolled during the period the compensability of a claim or liability for particular treatment
remains an issue in a compensation case.
(f)
The Commission shall hear and determine any dispute between an employee's current
and past attorney or attorneys regarding the division of a fee as approved by the Commission
pursuant to this section. An attorney who is a party to an action under this subsection shall have
the same rights of appeal as outlined in subsection (c) of this section. (1929, c. 120, s. 64; 1955,
c. 1026, s. 4; 1959, cc. 1268, 1307; 1973, c. 520, s. 4; 1981, c. 521, s. 4; 1991, c. 703, s. 6; 1993,
c. 539, s. 680; 1994, Ex. Sess., c. 24, s. 14(c); 1993 (Reg. Sess., 1994), c. 679, s. 9.1; 2013-278,
s. 1.)
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77
§ 97-90.1. Insurers that provide employee's health benefit plans, disability income plans, or
any other health insurance plans as real parties in interest; reimbursement.
An insurer that covers an employee under a health benefit plan as defined in G.S. 58-3-167, a
disability income plan, or any other health insurance plan is not a real party in interest and shall
not intervene or participate in any proceeding or settlement agreement under this Article to
determine whether a claim is compensable under this Article or to seek reimbursement for
medical payments under its plan. The insurer that covers an employee under a health benefit plan
as defined in G.S. 58-3-167 or any other health insurance plan may seek reimbursement from the
employee, employer, or carrier that is liable or responsible for the specific medical charge
according to a final adjudication of the claim under this Article or an order of the Commission
approving a settlement agreement entered into under this Article for health plan payments for
that specific medical charge. Upon the admission or adjudication that a claim is compensable, the
party or parties liable shall notify in writing any known health benefit plan covering the
employee of the admission or adjudication. (2001-216, s. 1; 2001-487, s. 102(b).)
§ 97-91. Commission to determine all questions.
All questions arising under this Article if not settled by agreements of the parties interested
therein, with the approval of the Commission, shall be determined by the Commission, except as
otherwise herein provided. (1929, c. 120, s. 65.)
§ 97-92. Employer's record and report of accidents; records of Commission not open to
public; supplementary report upon termination of disability; penalty for refusal
to make report; when insurance carrier liable.
(a)
Every employer shall hereafter keep a record of all injuries, fatal or otherwise,
received by his employees in the course of their employment on blanks approved by the
Commission. Within five days after the occurrence and knowledge thereof as provided in G.S.
97-22 of an injury to an employee, causing his absence from work for more than one day or
charges for medical compensation exceeding the amount set by the Commission, a report thereof
shall be made in writing and mailed or transmitted to the Commission in the form approved by
the Commission for this purpose.
(b)
The records of the Commission that are not awards under G.S. 97-84 and that are not
reviews of awards under G.S. 97-85, insofar as they refer to accidents, injuries, and settlements
are not public records under G.S. 132-1 and shall not be open to the public, but only to the
parties satisfying the Commission of their interest in such records and the right to inspect them,
and to State and federal agencies pursuant to G.S. 97-81.
(c)
Upon the termination of the disability of the injured employee, or if the disability
extends beyond a period of 60 days, then, also, at the expiration of such period the employer
shall make a supplementary report to the Commission on blanks to be procured from the
Commission for the purpose.
(d)
The said report shall contain the name, nature, and location of the business of the
employer and name, age, sex, and wages and occupation of the injured employee, and shall state
the date and hour of the accident causing injury, the nature and cause of the injury, and such
other information as may be required by the Commission.
(e)
Any employer who refuses or neglects to make the report required by this section
shall be liable for a penalty of not less than five dollars ($5.00) and not more than twenty-five
dollars ($25.00) for each refusal or neglect. The fine herein provided may be assessed by the
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Commission in an open hearing, with the right of review and appeal as in other cases. In the
event the employer has transmitted the report to the insurance carrier for transmission by such
insurance carrier to the Industrial Commission, the insurance carrier willfully neglecting or
failing to transmit the report shall be liable for the said penalty.
(f)
Any bill, report, application, and document of every nature and kind, which is
required or permitted by Commission rules to be transmitted to the Commission by electronic
media or is recorded among the Commission records on computer disk, optical disk, microfilm,
or similar media and which is produced or reproduced in written form in the normal course of
business or is certified as a true and accurate copy of the data recorded at the Commission in the
normal course of its business shall be treated as a signed original in all uses before the
Commission and as a duplicate within the meaning of Rule 1003 of the North Carolina Rules of
Evidence. (1929, c. 120, s. 66; 1945, c. 766; 1991, c. 703, s. 9; 1991 (Reg. Sess., 1992), c. 894, s.
3; 1993 (Reg. Sess., 1994), c. 679, s. 10.8; 2001-216, s. 3; 2001-487, s. 102(b).)
§ 97-93. Employers required to carry insurance or prove financial ability to pay for
benefits; employers required to post notice; self-insured employers regulated by
Commissioner of Insurance.
(a)
Every employer subject to the provisions of this Article relative to the payment of
compensation shall either:
(1)
Insure and keep insured his liability under this Article in any authorized
corporation, association, organization, or in any mutual insurance association
formed by a group of employers so authorized; or
(2)
Repealed by Session Laws 1997-362, s. 5.
(3)
Obtain a license from the Commissioner of Insurance under Article 5 of this
Chapter or under Article 47 of Chapter 58 of the General Statutes.
(b)
through (d) Repealed by Session Laws 1997-362, s. 5.
(e)
Every employer who is in compliance with the provisions of subsection (a) of this
section shall post in a conspicuous place in places of employment a notice stating that
employment by this employer is subject to the North Carolina Workers' Compensation Act and
stating whether the employer has a policy of insurance against liability or qualifies as a
self-insured employer. In the event the employer allows its insurance to lapse or ceases to qualify
as a self-insured employer, the employer shall, within five working days of this occurrence,
remove any notices indicating otherwise. (1929, c. 120, s. 67; 1943, c. 543; 1973, c. 1291, s. 12;
1979, c. 345; 1983, c. 728; 1985, c. 119, s. 1; 1993, c. 120, ss. 1, 2; 1993 (Reg. Sess., 1994), c.
679, s. 8.2; 1995, c. 193, s. 64; c. 471, s. 1; 1997-362, s. 5.)
§ 97-94. Employers required to give proof that they have complied with preceding section;
penalty for not keeping liability insured; review; liability for compensation;
criminal penalties for failure to secure payment of compensation.
(a)
Every employer subject to the compensation provisions of this Article shall file with
the Commission, in form prescribed by it, as often as the Commission determines to be
necessary, evidence of its compliance with the provisions of G.S. 97-93 and all other provisions
relating thereto.
(b)
Any employer required to secure the payment of compensation under this Article who
refuses or neglects to secure such compensation shall be punished by a penalty of one dollar
($1.00) for each employee, but not less than fifty dollars ($50.00) nor more than one hundred
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79
dollars ($100.00) for each day of such refusal or neglect, and until the same ceases; and the
employer shall be liable during continuance of such refusal or neglect to an employee either for
compensation under this Article or at law at the election of the injured employee.
The penalty herein provided may be assessed by the Industrial Commission administratively,
with the right to a hearing if requested within 30 days after notice of the assessment of the
penalty and the right of review and appeal as in other cases. Enforcement of the penalty shall be
made by the Office of the Attorney General. The clear proceeds of penalties provided for in this
subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S.
115C-457.2.
(c)
Any employer required to secure the payment of compensation under this Article who
willfully fails to secure such compensation shall be guilty of a Class H felony. Any employer
required to secure the payment of compensation under this Article who neglects to secure the
payment of compensation shall be guilty of a Class 1 misdemeanor.
(d)
Any person who, with the ability and authority to bring an employer in compliance
with G.S. 97-93, willfully fails to bring the employer in compliance, shall be guilty of a Class H
felony. Any person who, with the ability and authority to bring an employer in compliance with
G.S. 97-93, neglects to bring the employer in compliance, shall be guilty of a Class 1
misdemeanor. Any person who violates this subsection may be assessed a civil penalty by the
Commission in an amount up to one hundred percent (100%) of the amount of any compensation
due the employer's employees injured during the time the employer failed to comply with G.S.
97-93.
(e)
Notwithstanding the provisions of G.S. 97-101, the Commission may suspend
collection or remit all or part of any civil penalty imposed under this section on condition that the
employer or person pays the compensation due and complies with G.S. 97-93. (1929, c. 120, s.
68; 1945, c. 766; 1963, c. 499; 1973, c. 1291, s. 13; 1985, c. 119, s. 4; 1985 (Reg. Sess., 1986), c.
1027, s. 54; 1987, c. 729, s. 17; 1993, c. 539, s. 681; 1994, Ex. Sess., c. 24, s. 14(c); 1993 (Reg.
Sess., 1994), c. 679, s. 8.1; 1997-353, s. 2; 1998-215, s. 115.)
§ 97-95. Actions against employers failing to effect insurance or qualify as self-insurer.
As to every employer subject to the provisions of this Article who shall fail or neglect to
keep in effect a policy of insurance against compensation liability arising hereunder with some
insurance carrier as provided in G.S. 97-93, or who shall fail to qualify as a self-insurer as
provided in the Article, in addition to other penalties provided by this Article, such employer
shall be liable in a civil action which may be instituted by the claimant for all such compensation
as may be awarded by the Industrial Commission in a proceeding properly instituted before said
Commission, and such action may be brought by the claimant in the county of his residence or in
any county in which the defendant has any property in this State; and in said civil action,
ancillary remedies provided by law in civil actions of attachment, receivership, and other
appropriate ancillary remedies shall be available to plaintiff therein. Said action may be instituted
before the award shall be made by the Industrial Commission in such case for the purpose of
preventing the defendant from disposing of or removing from the State of North Carolina for the
purpose of defeating the payment of compensation any property which the defendant may own in
this State. In said action, after being instituted, the court may, after proper amendment to the
pleadings therein, permit the recovery of a judgment against the defendant for the amount of
compensation duly awarded by the North Carolina Industrial Commission and subject any
property seized in said action for payment of the judgment so awarded. The institution of said
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80
action shall in no wise interfere with the jurisdiction of said Industrial Commission in hearing
and determining the claim for compensation in full accord with the provisions of this Article.
Nothing in this section shall be construed to limit or abridge the rights of an employee as
provided in subsection (b) of G.S. 97-94. (1941, c. 352.)
§ 97-96: Repealed by Session Laws 1997-362, s. 7.
§ 97-97. Insurance policies must contain clause that notice to employer is notice to insurer,
etc.
All policies insuring the payment of compensation under this Article must contain a clause to
the effect that, as between the employer and the insurer the notice to or acknowledgment of the
occurrence of the injury on the part of the insured employer shall be deemed notice or
knowledge as the case may be, on the part of the insurer; that jurisdiction of the insured for the
purposes of this Article shall be jurisdiction of the insurer, that the insurer shall in all things be
bound by and subject to the awards, judgments, or decrees rendered against such insured
employer, and that insolvency or bankruptcy of the employer and/or discharge therein shall not
relieve the insurer from the payment of compensation for disability or death sustained by an
employee during the life of such policy or contract. (1929, c. 120, s. 70.)
§ 97-98.
Policy must contain agreement promptly to pay benefits; continuance of
obligation of insurer in event of default.
No policy of insurance against liability arising under this Article shall be issued unless it
contains the agreement of the insurer that it will promptly pay to the person entitled to same all
benefits conferred by this Article, and all installments of the compensation that may be awarded
or agreed upon, and that the obligation shall not be affected by any default of the insured after
the injury or by any default in giving notice required by such policy or otherwise. Such
agreement shall be construed to be a direct promise by the insurer to the person entitled to
compensation enforceable in his name. (1929, c. 120, s. 71.)
§ 97-99.
Law written into each insurance policy; form of policy to be approved by
Commissioner of Insurance; single catastrophe hazards.
(a)
Every policy for the insurance of the compensation in this Article, or against liability
therefor, shall be deemed to be made subject to the provisions of this Article. No corporation,
association or organization shall enter into any such policy of insurance unless its form has been
approved by the Commissioner of Insurance.
(b)
This Article shall not apply to policies of insurance against loss from explosion of
boilers or flywheels or other similar single catastrophe hazards: Provided, that nothing in this
Article relieves an employer from liability for injury or death of an employee as a result of such
an explosion or catastrophe. (1929, c. 120, s. 72; 1943, c. 170; 1945, c. 381, s. 1; 1959, c. 863, s.
5; 1967, c. 1218; 1993, c. 504, s. 31; 2001-241, s. 1.)
§ 97-100. Rates for insurance; carrier to make reports for determination of solvency; tax
upon premium; wrongful or fraudulent representation of carrier punishable as
misdemeanor; notices.
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81
(a)
The rates charged by all carriers of insurance, including the parties to any mutual
insurance association writing insurance against the liability for compensation under this Article,
shall be fair, reasonable, and adequate.
(b)
Each insurance carrier shall report to the Commissioner of Insurance, in accordance
with rules adopted by the Commissioner of Insurance, for the purpose of determining the
solvency of the carrier and the adequacy of its rates; for this purpose the Commissioner of
Insurance may inspect the books and records of any insurance carrier, and examine its agents,
officers, and directors under oath.
(c)
Every insurer under this Article, every employer carrying its own risk under G.S.
97-93, and every group of employers that has pooled the employers' liabilities under G.S. 97-93
is subject to the premiums tax levied in Article 8B of Chapter 105 of the General Statutes.
(d)
through (f). Repealed by Session Laws 1995, c. 360, s. 1.
(g)
Any person who acts or assumes to act as agent for any insurance carrier whose
authority to do business in this State has been suspended, while the suspension remains in force,
who neglects or refuses to comply with any of the provisions of this section, or who willfully
makes a false or fraudulent statement of the business or condition of any insurance carrier, is
guilty of a Class 2 misdemeanor.
(h)
Whenever by this Article, or the terms of any policy contract, any officer is required
to give any notice to an insurance carrier, the notice may be given by delivery, or by mailing by
registered letter properly addressed and stamped, to the principal office or general agent of the
insurance carrier within this State, or to its home office, or to the secretary, general agent, or
chief officer of the carrier in the United States, or to the Commissioner of Insurance.
(i)
through (k). Repealed by Session Laws 1995, c. 360, s. 1. (1929, c. 120, s. 73; 1931,
c. 274, s. 13; 1947, c. 574; 1961, c. 833, s. 13; 1977, c. 828, s. 7; 1985, c. 119, s. 2; 1985 (Reg.
Sess., 1986), c. 928, s. 13; 1989, c. 647, s. 1; 1993, c. 539, s. 682; 1994, Ex. Sess., c. 24, s. 14(c);
1995, c. 360, s. 1(h).)
§ 97-101. Collection of fines and penalties.
The Industrial Commission shall have the power by civil action brought in its own name to
enforce the collection of any fines or penalties provided by this Article. (1931, c. 274, s. 14;
2015-264, s. 52.)
§ 97-101.1. Commission may issue writs of habeas corpus.
The Industrial Commission may issue a writ of habeas corpus ad testificandum under Article
8 of Chapter 17 of the General Statutes although it is not a court of record. (1998-217, s.
31.1(a).)
Article 2.
Compensation Rating and Inspection Bureau.
§§ 97-102 through 97-104.6: Repealed by Session Laws 1977, c. 828, s. 8, as amended by
Session Laws 1979, c. 824, s. 8.
Article 3.
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82
Security Funds.
§§ 97-105 through 97-122: Repealed by Session Laws 1991 (Regular Session, 1992), c. 802,
s. 12, as amended by Session Laws 1991 (Regular Session, 1992), c. 1030, s. 51.3.
§§ 97-123 through 97-129. Reserved for future codification purposes.
Article 4.
North Carolina Self-Insurance Security Association.
§ 97-130. Definitions.
As used in this Article:
(1)
"Association" means the North Carolina Self-Insurance Security Association
established by G.S. 97-131.
(1a) "Association Aggregate Security System" means the security system
established by the Association under G.S. 97-133 whereby individual
self-insurers collectively secure their aggregate self-insured workers'
compensation liabilities through the North Carolina Self-Insurance Security
Association.
(2)
"Board" means the Board of Directors of the Association established by G.S.
97-132.
(3)
"Commissioner" means the North Carolina Commissioner of Insurance.
(4)
"Covered claim" means an unpaid claim against an insolvent individual
self-insurer or group self-insurer that relates to an injury that occurs while the
individual self-insurer or group self-insurer is a member of the Association
and that is compensable under this Chapter.
(5)
"Fund" means the North Carolina Self-Insurance Security Fund established by
G.S. 97-133.
(5a) "Group" or "Group self-insurer" means a group self-insurer licensed by the
Commissioner under Part 1, Article 47 of Chapter 58 of the General Statutes.
(5b) "Individual self-insurer" means an individual employer licensed by the
Commissioner under Article 5 of this Chapter.
(6)
"Member self-insurer" or "member" means an individual self-insurer or group
self-insurer that is required to be a member of the Association under this
Article or Part 1, Article 47 of Chapter 58 of the General Statutes.
(7)
"Plan" means the Plan of Operation authorized by G.S. 97-134.
(8)
Repealed by Session Laws 2005-400, s. 1.2, effective January 1, 2006.
(9)
"Servicing facility" means those persons delegated by the Board to settle or
compromise claims and to expend Fund assets to pay claims. (1985 (Reg.
Sess., 1986), c. 1013, s. 1; 1987, c. 528, s. 1; 1997-362, s. 8; 2005-400, s. 1.2;
2011-196, s. 10.)
§ 97-131. Creation.
(a)
There is created a nonprofit unincorporated legal entity to be known as the North
Carolina Self-Insurance Security Association. The Association is to provide mechanisms for the
payment of covered claims against member self-insurers, to avoid excessive delay in payment of
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83
covered claims, to avoid financial loss to claimants because of the insolvency of a member
self-insurer, to assist the Commissioner in the detection of self-insurer insolvencies, to fund the
Association Aggregate Security System, and to capitalize the Fund to ensure the availability of
financial resources to pay covered claims and to fund the activities of the Association.
(b)
All individual self-insurers and group self-insurers shall be and remain members of
the Association as a condition of being licensed to self-insure in this State. The Association shall
perform its functions under a Plan of Operation established or amended, or both, by the Board
and shall exercise its powers through the Board.
(1)
An individual self-insurer or a group self-insurer shall be deemed to be a
member of the Association for purposes of another member's insolvency, as
defined in G.S. 97-135, when:
a.
The individual self-insurer or group self-insurer is a member of the
Association when an insolvency occurs, or
b.
The individual self-insurer or group self-insurer has been a member of
the Association at some point in time during the 12-month period
immediately preceding the insolvency in question.
(2)
An individual self-insurer or a group self-insurer shall be deemed to be a
member of the Association for purposes of its own insolvency if it is a
member when the compensable injury occurs.
(3)
In determining the membership of the Association for the purposes of
subdivisions (1) and (2) of this subsection for any date after the effective date
of this Article, no individual self-insurer or group self-insurer may be deemed
to be a member of the Association on any date after the effective date of this
Article, unless that employer is on that date licensed as an individual
self-insurer by the Commissioner under Article 5 of this Chapter or a group of
employers is at that time licensed as a group self-insurer by the Commissioner
under Article 47 of Chapter 58 of the General Statutes. (1985 (Reg. Sess.,
1986), c. 1013, s. 1; 1987, c. 528, s. 2; 1997-362, s. 9; 2005-400, s. 2;
2011-196, s. 10.)
§ 97-132. Board of directors.
The Board shall consist of not less than nine directors serving terms as established in the
Plan. The directors shall be selected by the members of the Association and shall serve for
three-year terms and until a successor is elected and qualified. There is no limitation on the
number of terms a director may serve. Directors may be reimbursed from the assets of the
Association for expenses incurred by them as directors. (1985 (Reg. Sess., 1986), c. 1013, s. 1;
1987, c. 528, s. 3; 2005-400, s. 3; 2011-196, s. 10.)
§ 97-133. Powers and duties of the Association.
(a)
The Association shall:
(1)
Repealed by Session Laws 1999-219, s. 7.2, effective June 25, 1999.
(1a) Administer a fund, to be known as the North Carolina Self-Insurance Security
Fund, which shall receive the assets of the North Carolina Self-Insurance
Guaranty Fund previously established under subdivision (2) of this subsection,
the assessments required by subdivisions (2a) and (3a) of this subsection and
any other sums received by the Association. The costs of administering the
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84
(2)
(2a)
(3)
(3a)
Association shall be borne by the Fund. The Association is authorized to
secure insurance, primary excess insurance, reinsurance, bonds, other
insurance, financial guarantees and related financial instruments to effectuate
the purposes of the Association. The Board will invest the Fund assets
pursuant to an investment policy adopted by the Board and reviewed and
approved annually by the Department of the State Treasurer. The earnings
from investment of Fund assets shall be placed in or credited to the Fund.
Repealed by Session Laws 2005-400, s. 4, effective January 1, 2006.
Establish and operate the Association Aggregate Security System as defined
in G.S. 97-130 and G.S. 97-165 as follows:
a.
The Association shall annually operate and provide an Association
Aggregate Security System through a combination of cash on deposit
in the Fund, securities, surety bonds, irrevocable letters of credit,
insurance, reinsurance, or other financial instruments or guarantees
owned or entered into by the Association. The Association shall assess
the individual self-insurers that participate in the Association
Aggregate Security System pursuant to subdivision (3a) of this
subsection.
b.
through d. Repealed by Session Laws 2011-196, s. 10, effective July 1,
2011.
e.
If the Association determines it is not feasible or practical to operate
the Association Aggregate Security System in any given year, it may
terminate or suspend the Association Aggregate Security System and
shall notify the Commissioner at least 90 days prior to the termination
or suspension of the Association Aggregate Security System for that
particular year. During any period that the Associate Aggregate
Security System is terminated or suspended, every self-insurer shall
deposit with the Commissioner, or continue to deposit, the amount
required by G.S. 97-185(b3) in the manner prescribed by G.S.
97-185(c).
f.
Group self-insurers shall not participate in the Association Aggregate
Security System.
Repealed by Session Laws 2005-400, s. 4, effective January 1, 2006.
Assess members of the Association as follows:
a.
Association Aggregate Security System assessments. – The
Association shall assess each individual self-insurer participating in
the Association Aggregate Security System a security system
assessment. The amount of the security system assessment charged to
each individual self-insurer participating in the Association Aggregate
Security System shall be based on the Association's reasonable
consideration of all of the following factors:
1.
The total amount of assessments necessary to provide
aggregate security for all participating individual self-insurers.
2.
The individual self-insurer's total workers' compensation
liabilities under the Act.
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85
3.
(4)
(5)
(6)
(7)
(8)
The financial strength and creditworthiness of the participating
individual self-insurer.
4.
Any other relevant factors.
b.
Special assessment. – In the event that there are covered claims against
an insolvent member or members and the assets of the Fund are not
sufficient to pay the obligations of the Association, then the
Association may collect a special assessment from the members in an
amount sufficient to pay the aggregate value of such covered claims.
Each member's special assessment shall be determined by the Board
and shall be based on the proportion of the member's total obligations
under the Act to the aggregate total of all members' obligations under
the Act.
c.
Initial assessments. – An individual self-insurer that becomes a
member and does not initially participate in the Association Aggregate
Security System shall pay an initial assessment to the Association in
an amount determined by the Board. A group self-insurer, upon
receiving its initial license from the Commissioner, shall pay an initial
assessment to the Association in an amount determined by the Board.
d.
Each member shall be notified of assessments no later than 30 days
before the assessment is due.
e.
Delinquent assessments, except as otherwise provided, shall bear
interest at a rate to be established by the Board.
f.
Group assessments. – The Association may annually assess each
member group self-insurer in an amount not to exceed two percent
(2%) of the group self-insurer's annual gross premiums for the
preceding calendar year, as determined under G.S. 105-228.5(b), (b1),
and (c).
Be obligated to pay covered claims.
After paying any covered claim, be subrogated to the rights of the injured
employee and dependents and be entitled to enforce liability against the
self-insurer or any third party by any appropriate action brought in its own
name or in the name of the injured employee and dependents.
Expend Fund assets in amounts necessary to pay all of the following:
a.
The obligations of the Association under this Article subsequent to an
insolvency.
b.
The expenses of handling covered claims subsequent to an insolvency.
c.
The cost of examinations under G.S. 97-137.
d.
The costs of implementing and operating the Association Aggregate
Security System.
e.
All other expenses authorized by this Article.
Investigate claims brought against the Association and adjust, compromise,
settle, and pay covered claims to the extent of the Association's obligation;
and deny all other claims. The Association may review settlements to which
the insolvent member was a party to determine the extent to which such
settlements may be properly contested.
Notify such persons as the Commissioner directs under G.S. 97-136.
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86
(9)
Handle claims through its directors, its employees, or through one or more
members or other persons designated as servicing facilities. Designation of a
member as a servicing facility may be declined by such member.
(10) Reimburse each servicing facility for obligations of the Association paid by
the facility and for expenses incurred by the facility while handling claims on
behalf of the Association.
(11) Pay any other expenses of the Association authorized by this section.
(12) Repealed by Session Laws 2005-400, s. 4, effective January 1, 2006.
(13) Require each member to annually determine its total undiscounted workers'
compensation claims liability and require each member to notify the
Association of this determination.
(b)
The Association may:
(1)
Employ or retain such persons, including, but not limited to, adjustors,
brokers, accountants, attorneys, financial advisors, investment bankers,
placement agents, and consultants, as the Board may determine are necessary
to handle claims, perform other duties of, provide services to, and consult with
the Association.
(2)
Borrow funds necessary to effect the purposes of this Article in accord with
the Plan, including entering into standby lines of credit.
(3)
Sue or be sued.
(4)
Negotiate and become a party to such contracts as are necessary to carry out
the purpose of this section.
(5)
Perform such other acts as are necessary or proper to effectuate the purpose of
this section.
(6)
Repealed by Session Laws 2011-196, s. 10, effective July 1, 2011.
(c)
Repealed by Session Laws 2005-400, s. 4, effective January 1, 2006.
(c1) The Association shall provide in its Plan that the functions of administration and
adjusting claims shall not be performed by the same entity that provides legal representation to
the Association for claims.
(d)
Repealed by Session Laws 2005-400, s. 4, effective January 1, 2006. (1985 (Reg.
Sess., 1986), c. 928, s. 1(a); 1985 (Reg. Sess., 1986), c. 1013, s. 1; 1987, c. 528, ss. 4-10; 1989,
c. 485, s. 27; 1995, c. 533, s. 1; 1997-475, ss. 2.3, 2.4; 1999-219, s. 7.2; 2003-115, ss. 1, 2;
2005-400, s. 4; 2009-242, s. 1; 2011-196, s. 10.)
§ 97-134. Plan of Operation.
The Plan is as follows:
(1)
The Board shall adopt a Plan of Operation and any amendments necessary or
suitable to assure the fair, reasonable, and equitable administration of the
Association.
(2)
All member self-insurers shall comply with the Plan.
(3)
The Plan shall:
a.
Establish the procedures whereby all the powers and duties of the
Association under G.S. 97-133 will be performed.
b.
Establish procedures for investing and managing Fund assets.
c.
Adopt a reasonable mechanism and procedure to achieve equity in
assessing members under G.S. 97-133.
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d.
e.
f.
g.
h.
i.
j.
Establish the amount and method of reimbursing members of the
Board under G.S. 97-132.
Establish procedures by which claims may be filed with the
Association and establish acceptable forms of proof of covered claims.
Establish regular places and times for meetings of the Board.
Establish procedures for records to be kept of all financial transactions
of the Association, its agents, and the Board.
Provide that any member self-insurer aggrieved by any final action or
decision of the Association may appeal to the Commissioner within 30
days after the action or decision.
Repealed by Session Laws 2011-196, s. 10, effective July 1, 2011.
Contain additional provisions necessary or proper for the execution of
the powers and duties of the Association. (1985 (Reg. Sess., 1986), c.
1013, s. 1; 1987, c. 528, s. 11; 2005-400, s. 5; 2011-196, s. 10.)
§ 97-135. Insolvency.
A member self-insurer shall be insolvent for the purposes of this Article under any of the
following circumstances:
(1)
Determination of insolvency by a court of competent jurisdiction.
(2)
Institution of bankruptcy proceedings by or regarding the member self-insurer.
(3)
The Board determines that the member self-insurer's total liabilities exceed its
total assets or the member self-insurer is unable or ceases to pay its debts as
they fall due or in the ordinary course of business.
(4)
A member self-insurer is deemed to be insolvent, bankrupt, or in default as
defined by the terms of any security instrument created pursuant to the
Association Aggregate Security System. (1985 (Reg. Sess., 1986), c. 1013, s.
1; 1987, c. 528, s. 12; 2005-400, s. 6.1.)
§ 97-136. Powers and duties of the Commissioner.
(a)
The Commissioner shall:
(1)
Notify the Association of the existence of an insolvent member self-insurer
not later than 30 days after he receives notice of an insolvency pursuant to the
standards set forth in G.S. 97-135.
(2)
Repealed by Session Laws 2011-196, s. 10, effective July 1, 2011.
(b)
The Commissioner may:
(1)
Require that the Association notify the insureds of the insolvent member
self-insurer and any other interested parties of the insolvency and of their
rights under this Article. The notifications shall be by mail at their last known
addresses, where available; but if required information for notification is not
available, notice by publication in a newspaper of general circulation in this
State shall be sufficient; and
(2)
Revoke the designation of any servicing facility if the Commissioner finds
claims are being handled unsatisfactorily. (1985 (Reg. Sess., 1986), c. 1013,
s. 1; 2005-400, s. 6.2; 2011-196, s. 10.)
§ 97-137. Examination of the Association.
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88
The Association shall be subject to examination and regulation by the Commissioner. The
Board shall submit, not later than June 1 of each year, a financial report for the preceding
calendar year in a form approved by the Commissioner. (1985 (Reg. Sess., 1986), c. 1013, s. 1;
2011-196, s. 10.)
§ 97-138. Tax exemption.
The Association shall be exempt from payment of all fees and all taxes levied by this State or
any of its political subdivisions, except taxes levied on real or personal property. (1985 (Reg.
Sess., 1986), c. 928, s. 1(b).)
§ 97-139. Immunity.
There shall be no liability on the part of and no cause of action of any nature may arise
against any member self-insurer, the Association, or its agents or employees, the Board or its
individual members, or the Commissioner or his representatives for any acts or omissions taken
by them in the performance of their powers and duties under this Article. The immunity
established by this section shall not extend to willful neglect or malfeasance that would
otherwise be actionable. (1985 (Reg. Sess., 1986), c. 1013, s. 1.)
§ 97-140. Nonduplication of recovery.
Any person having a covered claim that may be recovered under more than one insurance or
self-insurance guaranty or security association or its equivalent shall seek recovery first from the
association of the place or residence of the claimant. Any recovery under this Article shall be
reduced by the amount of recovery from any other insurance guaranty or security association or
its equivalent. (1985 (Reg. Sess., 1986), c. 1013, s. 1; 2005-400, s. 7.)
§ 97-141. Stay of proceedings.
All claims or proceedings under this Chapter to which the insolvent member self-insurer is a
party either before the Industrial Commission or a court in this State and the running of all time
periods against either the insolvent member self-insurer or the Association under this Chapter
shall be stayed for 60 days from the later of the date of notice to the Association of the
insolvency or the date the Association is notified of a claim or proceeding under this Chapter in
order to permit the Association to investigate, prosecute, or defend properly any petition, claim,
or appeal under this Chapter, provided that the payment of weekly compensation for incapacity
is made whenever time periods or proceedings affecting the payment of weekly compensation
are stayed. (1985 (Reg. Sess., 1986), c. 1013, s. 1; 2003-115, s. 6.)
§ 97-142. Disposition of assets upon dissolution.
In the event of dissolution of the Association, all assets remaining after provision for
satisfaction of all outstanding claims shall be distributed to the State Treasurer for establishment
of a reserve to satisfy potential claims against the Association and, all such claims being
satisfied, for inclusion in the general fund of the State. (1985 (Reg. Sess., 1986), c. 1013, s. 1.)
§ 97-143. Use of deposits made by insolvent member self-insurers.
After the Commissioner has notified the Association, under G.S. 97-136(a), that a member is
insolvent, the Commissioner shall assign and deliver to the Association, and the Association is
authorized to expend any deposit made by the insolvent member under G.S. 58-47-90 or G.S.
NC General Statutes - Chapter 97
89
97-185, to the extent the deposit is needed by the Association to pay covered claims against the
insolvent member as required by this Article, and to the extent the deposit is needed to pay
expenses of the Association relating to covered claims against the insolvent member. For
insolvent individual member self-insurers that participate in the Association Aggregate Security
System, the Association is authorized to pursue recovery under every instrument, contract, and
form of security comprising the composite security. The Association shall account to the
Commissioner and the insolvent member or its successor for all deposits received from the
Commissioner under this section. (1991, c. 644, s. 25; 1997-362, s. 6; 2005-400, s. 8.)
§§ 97-144 through 97-164. Reserved for future codification purposes.
Article 5.
Individual Employers.
§ 97-165. Definitions.
As used in this Article:
(1)
"Act" means the Workers' Compensation Act established in Article 1 of this
Chapter.
(1a) "Affiliate of" or "person affiliated with" a specific person means a person that
indirectly through one or more intermediaries or directly controls, is
controlled by, or is under common control with the person specified.
(1b) "Association Aggregate Security System" means the security system
established pursuant to G.S. 97-133 whereby individual self-insurers
collectively secure their aggregate self-insured workers' compensation
liabilities under the Act through the North Carolina Self-Insurance Security
Association.
(2)
"Certified audit" means an audit on which a certified public accountant or a
foreign registered public accounting firm expresses his or her professional
opinion that the accompanying statements fairly present the financial position
of the self-insurer or the guarantor, in conformity with accounting principles
generally accepted in the United States or prepared in accordance with
International Financial Reporting Standards.
(3)
"Certified public accountant" or "CPA" means a CPA who is in good standing
with the American Institute of Certified Public Accountants and in all states in
which the CPA is licensed to practice. A CPA shall be recognized as
independent as long as the CPA conforms to the standards of the profession,
as contained in the Code of Professional Ethics of the American Institute of
Certified Public Accountants and Rules and Regulations and Code of Ethics
and Rules of Professional Conduct of the North Carolina State Board of
Certified Public Accountant Examiners, or similar code. The Commissioner
may hold a hearing to determine whether a CPA is independent and,
considering the evidence presented, may rule that the CPA is not independent
for purposes of expressing an opinion on financial statements prepared in
accordance with United States Generally Accepted Accounting Principles or
International Financial Reporting Standards. The Commission may require the
self-insurer or the guarantor to replace the CPA with another whose
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90
(4)
(4a)
(5)
(5a)
(6)
(6a)
(7)
(7a)
(8)
(8a)
(9)
(10)
(11)
relationship with the self-insurer or the guarantor is independent within the
meaning of this definition.
"Commissioner" means the Commissioner of Insurance.
"Control", "controlling", "controlled by", and "under common control with"
mean the direct or indirect possession of the power to direct or cause the
direction of the management and policies of a person through ownership of or
through proxies for voting of greater than fifty percent (50%) of the voting
securities, or in the case of a not-for-profit entity, the power to direct or cause
the direction of the management and policies of the entity.
"Corporate surety" means an insurance company authorized by the
Commissioner to write surety business in this State.
"Financial statement" means a financial statement as defined by accounting
principles generally accepted in the United States or a financial statement
prepared in accordance with International Financial Reporting Standards.
"Foreign registered public accounting firm" means a public accounting firm
that is organized and operates under the laws of a non-United States
jurisdiction, government, or political subdivision and is registered and in good
standing with the Public Company Accounting Oversight Board and
authorized by the Board to prepare or issue any audit report with respect to
any issuer.
"Guarantor" means a person within the same holding company system who
controls the applicant, whose financial statement is used by the applicant to
become a self-insurer under the Act, and who has guaranteed the payment of
the self-insurer's liability under the Act.
"Hazardous financial condition" means that, based on its present or reasonably
anticipated financial condition, a self-insurer or guarantor is insolvent or,
although not yet financially impaired or insolvent, is unlikely to be able to
meet its obligations with respect to known claims and reasonably anticipated
claims or to pay other obligations in the normal course of business.
"Holding company system" means an entity comprising two or more affiliated
persons.
"Management" means those persons who are authorized to direct or control
the operations of a self-insurer.
"Person" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust, unincorporated
organization, or any similar entity or any combination of the foregoing acting
in concert.
"Qualified actuary" means a member in good standing of the Casualty
Actuarial Society or a member in good standing of the American Academy of
Actuaries, who has been approved as qualified for signing casualty loss
reserve opinions by the Casualty Practice Council of the American Academy
of Actuaries, and is in compliance with G.S. 58-2-171.
"Self-insurer" means an individual self-insurer as defined by G.S. 97-130(5b).
"Subsidiary of" a specific person means an affiliate controlled by such person
indirectly through one or more intermediaries or an affiliate directly controlled
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91
by such person. (1997-362, s. 4; 1999-132, s. 13.5; 2004-199, s. 20(h);
2005-400, s. 9; 2009-172, s. 5.)
§ 97-170. License applications; required information.
(a)
No employer shall self-insure its workers' compensation liabilities under the Act
unless it is licensed by the Commissioner under this Article. This subsection does not apply to an
employer authorized to self-insure its workers' compensation liabilities under the Act prior to
December 1, 1997, whose authority to self-insure its workers' compensation liabilities under the
Act has not terminated after that date.
(b)
An applicant for a license as a self-insurer shall file with the Commissioner the
information required by subsection (d) of this section on a form prescribed by the Commissioner
at least 90 days before the proposed licensing date. No application is complete until the
Commissioner has received all required information. A copy of the application must also be filed
with the North Carolina Self-Insurance Security Association at least 90 days before the proposed
licensing date.
(c)
Only an applicant whose total fixed assets amount to five hundred thousand dollars
($500,000) or more may apply for a license. In judging the applicant's financial strength and
liquidity relative to its ability to comply with the Act, the Commissioner shall consider all of the
following relative to the applicant:
(1)
Organizational structure and management.
(2)
Financial strength.
(3)
Source and reliability of financial information.
(4)
Risks to be retained.
(5)
Workers' compensation loss history.
(6)
Number of employees.
(7)
Claims administration.
(8)
Excess insurance.
(9)
Access to excess insurance.
(d)
The license application shall be comprised of the following information:
(1)
Applicant name; organizational structure of the applicant, including any
controlling entity, subsidiaries, or affiliates; location of principal office;
contact person; organization date; type of operations within this State;
management background; and addresses of all plants or offices in this State.
(2)
Certified audited financial statements prepared by a CPA or submitted by a
foreign registered public accounting firm for the two most recent years. The
financial statement presentation shall facilitate application of ratio and trend
analysis.
(3)
Evidence of the insurance required by G.S. 97-190.
(4)
Repealed by Session Laws 1999-132, s. 13.7, effective June 4, 1999.
(5)
For applicants with 20 or more full-time employees, a certificate or other
evidence of safety inspection, satisfactory to the Commissioner, that certifies
that all safety requirements of the Department of Labor have been met.
(6)
Summary of workers' compensation benefits paid for the last three calendar
years and the total liability for all open claims within 30 days or some other
period acceptable to the Commissioner not to exceed 90 days, before the filing
of the application.
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(7)
Summary, by risk classification, of annual payroll and number of employees
within the State.
(8)
Repealed by Session Laws 2005-400, s. 10, effective January 1, 2006.
(9)
Proof of compliance with the claims administration provisions of Article 47 of
Chapter 58 of the General Statutes.
(10) A letter of approval for membership by the North Carolina Self-Insurance
Security Association.
(e)
Every applicant shall execute and file with the Commissioner an agreement, as part of
the application, in which the applicant agrees to participate in the Association Aggregate
Security System, or if excluded from the Association Aggregate Security System, to deposit with
the Commissioner pursuant to G.S. 97-185 cash, acceptable securities, an irrevocable letter of
credit in a form acceptable to the Commissioner issued by a bank acceptable to the
Commissioner, or a surety bond issued by a corporate surety, or a combination thereof, that will
guarantee the applicant's compliance with this Article and the Act. (1997-362, s. 4; 1999-132,
ss. 13.6, 13.7; 2003-212, s. 25; 2005-400, s. 10; 2009-172, s. 6.)
§ 97-175. License.
(a)
After the review of the application and all supporting materials, the Commissioner
shall either grant or deny a license. If a license is denied, the Commissioner shall notify the
applicant of the denial and inform the applicant of the deficiencies that constitute the basis for
denial.
(b)
If the deficiencies are resolved within 60 days after the Commissioner's notice of
denial, the applicant shall be granted a license. The applicant may be granted additional time to
remedy the deficiencies in its application. A request for an extension of time shall be made in
writing by the applicant within 30 days after notice of denial by the Commissioner. If the
requirements of this Article have not been met, the application shall be withdrawn or denied.
(1997-362, s. 4.)
§ 97-177.
License covering applicant and any subsidiary or applicant relying on a
guarantor; procedure; requirements.
(a)
The Commissioner may, in the Commissioner's discretion, upon request by an
applicant, issue a license to an applicant or to an applicant and one or more of its subsidiaries if
all of the following requirements are satisfied:
(1)
The applicant or a guarantor of the applicant executes a guaranty agreement,
in a form prescribed by the Commissioner, for the payment of all workers'
compensation liabilities covered under the Act. For any applicant or guarantor
that is a corporation, there shall be submitted, along with the guaranty
agreement, a board of directors' resolution from the respective corporation
authorizing the guaranty of the liabilities of the subsidiary company or
companies and granting signature authority to each person or officer executing
the agreement.
(2)
The applicant or guarantor files a statement with the Commissioner that lists
the percentage of ownership of voting securities or proxies representing voting
securities owned or held by the applicant or guarantor for each subsidiary, or
in the case of a not-for-profit entity, documentation acceptable to the
Commissioner evidencing control.
NC General Statutes - Chapter 97
93
(3)
The applicant and its guarantor or the applicant and its subsidiaries, whichever
applies, satisfy the requirements of G.S. 97-170(c).
(4)
All other applicable requirements for licensure under the Act are satisfied.
(b)
A license issued by the Commissioner pursuant to this section shall include the name
of the applicant, the name of each licensed subsidiary, and the date of issuance for each licensed
subsidiary.
(c)
If a self-insurer requests to add a subsidiary to its license, the Commissioner shall
review the request in accordance with this section. Upon approval, the Commissioner shall issue
to the self-insurer a new license that includes the newly licensed subsidiary and the date of
license issuance for the newly licensed subsidiary, and the self-insurer shall return the original
license to the Commissioner.
(d)
A self-insurer shall neither include nor delete a subsidiary from its license without the
Commissioner's prior written approval.
(e)
If a controlling relationship or guaranty agreement terminates, the self-insurer shall
retain all liabilities under the Act that were incurred by the self-insurer during the period of
self-insurance and shall account for all such liabilities until discharged, as evidenced by reports
filed with the Commissioner. Termination of a guaranty agreement does not affect the
guarantor's liability for payment of liabilities arising prior to termination of the agreement.
(2005-400, s. 11.)
§ 97-180. Reporting and records.
(a)
Every self-insurer shall submit, within 120 days after the end of its fiscal year, a
certified audited financial statement, prepared by a CPA or submitted by a foreign registered
public accounting firm, for that fiscal year. The financial statement presentation shall facilitate
the application of ratio and trend analysis. If the self-insurer was issued a license pursuant to
G.S. 97-177, the financial statement required under this subsection shall be that of the guarantor.
(b)
Every self-insurer shall submit within 120 days after the end of its fiscal year a report
from a qualified actuary setting forth an opinion certifying the loss and loss adjustment expense
reserves for workers' compensation obligations in North Carolina. The report shall show
liabilities, excess insurance carrier and other qualifying credits, if any, and net retained workers'
compensation liabilities.
(c)
Every self-insurer shall submit within 120 days after the end of its fiscal year a report
in the form of a sworn statement prescribed by the Commissioner, setting forth the total workers'
compensation benefits paid in the previous fiscal year, and the total outstanding workers'
compensation liabilities for each loss year, recorded at the close of its fiscal year for the net
retained liability.
(d)
Upon the request of the Commissioner, every self-insurer shall submit a report of its
annual payroll information. The report shall summarize payroll, by annual amount paid, and the
number of employees, by classification, using the rules, classifications, and rates in the most
recently approved Workers' Compensation and Employers' Liability Insurance Manual governing
the audits of payrolls and the adjustments of premiums. Every self-insurer shall maintain true
and accurate payroll records. These payroll records shall be maintained to allow for verification
of the completeness and accuracy of the annual payroll report.
(e)
Every self-insurer shall report promptly to the Commissioner changes in the name or
address of the self-insurer or guarantor; significant changes in the financial condition of the
self-insurer, guarantor, or any affiliate, including bankruptcy filings; and changes in its
NC General Statutes - Chapter 97
94
organizational structure, including its subsidiaries and affiliates. Any change shall be reported in
writing to the Commissioner within 10 days after the effective date of the change. Upon request
by the Commissioner, a self-insurer shall provide the Commissioner copies of documents or
information deemed necessary to determine whether any change has affected the privilege of the
employer to self-insure. (1997-362, s. 4; 1999-132, ss. 13.8, 13.9; 2005-400, s. 12; 2009-172, s.
7.)
§ 97-185. Deposits; surety bonds; letters of credit.
(a)
Repealed by Session Laws 2005-400, s. 13, effective January 1, 2006.
(a1) All individual self-insurers as defined in G.S. 97-130(5b) shall participate in the
Association Aggregate Security System established under G.S. 97-131 unless excluded by the
Board of Directors of the North Carolina Self-Insurance Security Association. The Board of
Directors of the North Carolina Self-Insurance Security Association shall exclude all of the
following from the Association Aggregate Security System:
(1)
Individual self-insurers whose licenses have previously been revoked by the
Commissioner.
(2)
Individual self-insurers with a debt rating as established by Standard & Poor's
Rating Service or by Moody's Investor Service, below the minimum Standard
& Poor's or Moody's ratings if a minimum debt rating has been established by
the Board of Directors of the North Carolina Self-Insurance Security
Association for the Association Aggregate Security System.
(3)
Individual self-insurers that have defaulted on the payment of their
self-insured workers' compensation liabilities.
(4)
Individual self-insurers that fail to submit sufficient financial information to
enable the Association to determine their total outstanding workers'
compensation liabilities, or their creditworthiness, or both.
The Board of Directors of the North Carolina Self-Insurance Security Association shall
notify the Commissioner of the individual self-insurers that are excluded from participating in
the Association Aggregate Security System.
(b)
Repealed by Session Laws 2003-115, s. 3, effective January 1, 2004.
(b1) Repealed by Session Laws 2005-400, s. 13, effective January 1, 2006.
(b2) An individual self-insurer that is excluded from participation in the Association
Aggregate Security System, including individual self-insurers that are granted a license to
self-insure after the North Carolina Self-Insurance Security Association annually implements the
Association Aggregate Security System, shall deposit with the Commissioner an amount not less
than one hundred percent (100%) of the individual self-insurer's total undiscounted outstanding
claims liability per the most recent report from a qualified actuary as required by G.S. 97-180(b),
but not less than five hundred thousand dollars ($500,000), or such greater amount as the
Commissioner prescribes based on, but not limited to, the financial condition of the individual
self-insurer and the risk retained by the individual self-insurer.
(b3) During any period of time that no Association Aggregate Security System is in effect,
individual self-insurers with a debt rating of BBB or better from Standard & Poor's Rating
Service, a division of McGraw Hill, Inc., or an equivalent rating from another national rating
agency shall deposit with the Commissioner an amount not less than fifty percent (50%) of the
individual self-insurer's total undiscounted outstanding claims liability per the most recent report
from a qualified actuary as required by G.S. 97-180(b), but not less than five hundred thousand
NC General Statutes - Chapter 97
95
dollars ($500,000). An individual self-insurer licensed pursuant to G.S. 97-177 may utilize the
debt rating of its guarantor for the purpose of establishing the application of this subsection. The
Commissioner shall consider and may, in the Commissioner's discretion, increase or reduce the
deposit to a greater or lesser percentage of the individual self-insurer's claims liability based on
the financial strength of the individual self-insurer and other financial information submitted by
the individual self-insurer. All other individual self-insurers shall deposit with the Commissioner
an amount not less than one hundred percent (100%) of the individual self-insurer's total
undiscounted outstanding claims liability per the most recent report from a qualified actuary as
required by G.S. 97-180(b), but not less than five hundred thousand dollars ($500,000), or such
greater amount as the Commissioner prescribes based on, but not limited to, the financial
condition of the individual self-insurer and the risk retained by the individual self-insurer.
(c)
Deposits received, changes to existing deposits, or deposits exchanged after the
effective date of this section, shall be comprised of one or more of the following:
(1)
Interest-bearing bonds of the United States of America.
(2)
Interest-bearing bonds of the State of North Carolina, or of its cities or
counties.
(3)
Certificates of deposit issued by any solvent bank domesticated in the State of
North Carolina that have a maturity of one year or greater.
(4)
Surety bonds in a form acceptable to the Commissioner and issued by a
corporate surety. A surety bond deposited pursuant to this subsection shall
require that the surety reimburse the Commissioner, or his successors, assigns,
or transferees, for any costs incurred in the collection of the proceeds of the
surety bond, including reasonable attorneys' fees, and any costs incurred in
administering the insolvent self-insurer's workers' compensation claims.
(4a) Irrevocable letters of credit in a form acceptable to the Commissioner issued
by a bank acceptable to the Commissioner. An irrevocable letter of credit
deposited pursuant to this subsection shall require that the bank reimburse the
Commissioner, or his successors, assigns, or transferees for any costs incurred
in the collection of the proceeds of the letter of credit, including reasonable
attorneys' fees.
(4b) The reimbursement of attorneys' fees and collections cost provided for in
subdivisions (4) and (4a) of this subsection shall be no greater than fifteen
percent (15%) of the penal amount of the bond and shall not come from the
proceeds of the bond or the letter of credit but shall be in addition to the
proceeds of the bond or the letter of credit.
(5)
Any other investments that are approved by the Commissioner.
(d)
All bonds or securities that are posted as a security deposit shall be valued annually at
market value. If the market value is less than the face value, the Commissioner may require the
self-insurer to post additional securities. In making this determination, the Commissioner shall
consider the self-insurer's or guarantor's financial condition, the amount by which market value
is less than face value, and the likelihood that the securities will be needed to provide benefits.
(e)
Securities deposited under this section shall be assigned to the Commissioner, the
Commissioner's successors, assigns, or trustees, on a form prescribed by the Commissioner in a
manner that renders the securities negotiable by the Commissioner. If a self-insurer or guarantor
is deemed by the Commissioner to be in a hazardous financial condition, the Commissioner may
sell or collect, or both, such amounts that will yield sufficient funds to meet the self-insurer's
NC General Statutes - Chapter 97
96
obligations under the Act. In the case of a letter of credit, the Commissioner may draw the full
amount of a letter of credit if the letter of credit is not renewed within 90 days prior to its
expiration or at any time that the bank issuing the letter of credit is no longer acceptable to the
Commissioner. Interest accruing on any negotiable security deposited under this Article shall be
collected and transmitted to the self-insurer if the self-insurer or guarantor is not in a hazardous
financial condition.
(f)
No judgment creditor, other than a claimant entitled to benefits under the Act, may
levy upon any deposits made under this section.
(g)
Pursuant to the provisions of this section and with the approval of the Commissioner,
deposits held by the Commissioner may be replaced with other acceptable forms of deposit in
amount determined by the Commissioner. Any deposit to be replaced with another form of
deposit shall not be released until the approved replacement deposit is received by the
Commissioner.
(h)
Any self-insurer that ceases to self-insure, whether by voluntary termination or by
revocation of license, shall continue to secure and be liable for its obligations under the Act and
shall continue to report to the Commissioner pursuant to G.S. 97-180. Upon the request of the
Commissioner, a self-insurer that ceases to self-insure shall submit filings, as prescribed in G.S.
97-180, to determine whether the deposit is sufficient to satisfy those workers' compensation
obligations incurred during the period that the self-insurer was licensed as a self-insurer. The
Commissioner may require an increase in the deposit amount or may grant a reduction in the
deposit amount to ensure that the deposit is sufficient to cover all existing and future obligations
incurred by the self-insurer while subject to the provisions of the Act.
(i)
An endorsement to a surety bond shall be filed with the Commissioner within 90 days
after the effective date of the endorsement. (1997-362, s. 4; 2003-115, ss. 3, 4, 5; 2005-400, s.
13; 2009-242, ss. 2, 3, 4; 2011-196, s. 11.)
§ 97-190. Excess insurance.
(a)
Every self-insurer, as a prerequisite for licensure under this Article, shall maintain
specific and aggregate excess loss coverage through an insurance policy. A self-insurer shall
maintain limits and retentions commensurate with its risk. A self-insurer's retention shall be the
lowest retention suitable for the self-insurer's exposures and level of annual premium. The
Commissioner may require different levels, or waive the requirement, of specific and aggregate
excess loss coverage consistent with the market availability of excess loss coverage, the
self-insurer's claims experience, and the self-insurer's or guarantor's financial condition.
(b)
An excess insurance policy required by this section shall be issued by either an
insurance company licensed in this State, a captive insurance company licensed in this State, or
an eligible surplus lines insurer as defined in G.S. 58-21-10 and shall:
(1)
Provide for at least 30 days' written notice of cancellation by registered or
certified mail, return receipt requested, to the self-insurer and to the
Commissioner.
(2)
Be renewable automatically at its expiration, except upon 30 days' written
notice of nonrenewal by certified mail, return receipt requested, to the
self-insurer and to the Commissioner.
(c)
Every self-insurer shall provide to the Commissioner evidence of coverage and any
amendments within 30 days after their effective dates. Every self-insurer shall, at the request of
NC General Statutes - Chapter 97
97
the Commissioner, furnish copies of its excess insurance policies and amendments. (1997-362,
s. 4; 2005-400, s. 14; 2013-116, s. 5.)
§ 97-195. Revocation, suspension or restriction of license.
(a)
Repealed by Session Laws 2005-400, s. 15, effective January 1, 2006.
(a1) The Commissioner may, upon at least 45 days notice and opportunity for a hearing,
revoke, suspend, or restrict the license of a self-insurer if any of the following apply:
(1)
The self-insurer fails or refuses to comply with any law, order, or rule
applicable to the self-insurer.
(2)
There is a determination of insolvency by a court of competent jurisdiction.
(3)
The self-insurer is in a hazardous financial condition.
(4)
The self-insurer has experienced a material loss or deteriorating operating
trends, or has reported a deficit financial position.
(5)
Any affiliate or subsidiary is insolvent, threatened with insolvency, or
delinquent in payment of its monetary or any other obligation.
(6)
The self-insurer has failed to pay premium taxes pursuant to Article 8B of
Chapter 105 of the General Statutes.
(7)
Contingent liabilities, pledges, or guaranties that either individually or
collectively involve a total amount that in the Commissioner's opinion may
affect a self-insurer's solvency.
(8)
The management of a self-insurer has failed to respond to the Commissioner's
inquiries about the condition of the self-insurer or has furnished false and
misleading information in response to an inquiry by the Commissioner.
(9)
The management of a self-insurer has filed any false or misleading sworn
financial statement, has released a false or misleading financial statement to a
lending institution or to the general public, or has made a false or misleading
entry or omitted an entry of material amount in the filed financial information.
(10) The self-insurer has experienced, or will experience in the foreseeable future,
cash flow or liquidity problems.
(11) The self-insurer has failed to make proper and timely payment of claims, as
required by this Article.
(12) Failure to pay any North Carolina Self-Insurance Security Association
assessments made pursuant to G.S. 97-133.
(13) Failure to participate in the Association Aggregate Security System or, if
excluded from participation in the Association Aggregate Security System,
failure to provide and maintain the deposit required by G.S. 97-185.
(b)
Repealed by Session Laws 2005-400, s. 15, effective January 1, 2006.
(c)
Any self-insurer subject to license revocation, suspension, or restriction under
subsection (a1) of this section may request an administrative hearing before the Commissioner to
review that order. If a hearing is requested, a notice of hearing shall be served, and the notice
shall state the time and place of hearing and the conduct, condition, or ground on which the
Commissioner based the order. Unless mutually agreed upon between the Commissioner and the
self-insurer, the hearing shall occur not less than 10 days nor more than 30 days after notice is
served and shall be either in Wake County or in some other place designated by the
Commissioner. The Commissioner shall hold all hearings under this section privately unless the
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self-insurer requests a public hearing, in which case the hearing shall be public. The request for a
hearing shall not stay the effect of the order. (1997-362, s. 4; 2003-221, s. 15; 2005-400, s. 15.)
§ 97-196. Civil penalties or restitution for violations; administrative procedure.
(a)
Whenever the Commissioner has reason to believe that a self-insurer has violated any
of the provisions of this Article, and the violation subjects the license of the self-insurer to
suspension or revocation, the Commissioner may, after notice and opportunity for a hearing,
proceed under the appropriate subsections of this section.
(b)
If the Commissioner finds a violation of this Article, the Commissioner may, in
addition to or instead of suspending or revoking the license, order the payment or a monetary
penalty as provided in subsection (c) of this section or petition the Superior Court of Wake
County for an order directing payment of restitution as provided in subsection (d) of this section,
or both. Each day during which a violation occurs constitutes a separate violation.
(c)
If the Commissioner orders the payment of a monetary penalty pursuant to subsection
(b) of this section, the penalty shall not be less than one hundred dollars ($100.00) nor more than
one thousand dollars ($1,000). In determining the amount of the penalty, the Commissioner shall
consider the degree and extent of harm caused by the violation, the amount of money that inured
to the benefit of the violator as a result of the violation, whether the violation was committed
willfully, and the prior record of the violator in complying or failing to comply with laws, rules,
or orders applicable to the violator. The clear proceeds of the penalty shall be remitted to the
Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. Payment of the civil
penalty under this section shall be in addition to payment of any other penalty for a violation of
the criminal laws of this State.
(d)
Upon petition of the Commissioner, the court may order the self-insurer who
committed a violation specified in subsection (b) of this section to make restitution in an amount
that would make whole any person harmed by the violation. The petition may be made at any
time, and the petition may be made in any appeal of the Commissioner's order.
(e)
Restitution to any State agency for extraordinary administrative expenses incurred in
the investigation and hearing of the violation may also be ordered by the court in such amount
that would reimburse the agency for the expenses.
(f)
Nothing in this section prevents the Commissioner from negotiating a mutually
acceptable agreement with any self-insurer as to the status of the self-insurer's license or as to
any civil penalty or restitution.
(g)
Unless otherwise specifically provided for, all administrative proceedings under this
Article are governed by Chapter 150B of the General Statutes. Appeals of the Commissioner's
orders under this section shall be governed by G.S. 58-2-75. (2005-400, s. 16.)
§ 97-200. Claims administration.
(a)
A self-insurer shall not utilize any claims adjuster unless the adjuster is licensed
under G.S. 58-33-26.
(b)
Every self-insurer shall comply with the provisions of Article 47 of Chapter 58 of the
General Statutes that are related to claims administration. (1997-362, s. 4; 2015-264, s. 53.)
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